Towards More Inclusive Protection: A Comparative Analysis of the Political Process and Socio-Economic Impact of Pension Re-Reforms in Argentina and Chile

Argentina and Chile were two pioneering countries in Latin America with regard to the creation of pension systems at the beginning of the 20th century (Mesa-Lago 1978). They were also at the forefront of pension privatization in the 1980s and 1990s:1 The Chilean pension reform of 1981 completely replaced the historical pay-as-you-go (PAYG) scheme with a new system based on individual capitalization accounts and private management, while reducing state responsibility to a minimum pension guaranteed for the insured who had contributed for at least 20 years. One decade after the Chilean reform, Argentina followed the Chilean example in the context of Washington Consensus reforms adopted in the early 1990s, being one of the 12 Latin American countries that introduced multi-pillar pension systems as advocated by the World Bank in its seminal publication Averting the Old-Age Crisis (World Bank 1994).2 The Argentinian pension model implemented in 1994 differed from the Chilean precedent on several accounts, however, mainly regarding the option to remain in a reformed public system (with tightened access criteria in terms of retirement age and contribution years) versus switching to a mixed model that combined a flat basic pension with individual fully funded (IFF) accounts modelled after the Chilean reform.3