Eastern Europe retreats from pension privatization
In the 1990s and early 2000s, pension privatization was a worldwide phenomenon. But several Eastern European countries have scaled back mandatory private retirement accounts and restored the role of public provision since the global financial crisis. In the current issue of Governance, Marek Naczyk and Stefan Domonkos explain the reversal, and why some countries have back-pedaled faster than others. The crisis strengthened the hand of domestic opponents of privatization, Naczyk and Domonkos say. But the capacity of opponents to cause a change in policy depended on how deeply indebted their country was, as well as the portfolio structure of pension funds. The authors suggest that their approach could help explain policy trends in other regions as well. Read the article.