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Economic Crises and Globalisation as Drivers of Pension Privatisation: an Empirical Analysis

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  • Markus Leibrecht

    (Henley Business School, Malaysia Campus)

  • Joelle H. Fiong

    (Nanyang Business School, Nanyang Technological University)

Abstract

Pension systems are core institutional arrangements that are expected to be stable and reliable over consecutive generations. Nevertheless, reforms in pension provision intensified over the past decades, with several countries opting for privatisation of their pension system. We ask which factors lead governments to privatise pension systems and focus on economic crises and different facets of increased global pressures. We conduct duration analyses on a cross-section of nearly 100 economies among which 28 privatise their pension system between 1981 and 2012. Consistent with the crisis-begets-reform hypothesis, we find that severe economic crises speed up reform implementation. Likewise, high growth in economic and political globalisation is conducive for pension privatisation. These findings are robust to a variety of alternations in the empirical methodology.

Suggested Citation

  • Markus Leibrecht & Joelle H. Fiong, 2017. "Economic Crises and Globalisation as Drivers of Pension Privatisation: an Empirical Analysis," ICMA Centre Discussion Papers in Finance icma-dp2017-05, Henley Business School, University of Reading.
    • Handle: RePEc:rdg:icmadp:icma-dp2017-05
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    More about this item

    Keywords

    economic crisis; pension reform; globalisation; duration analysis; privatisation;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • P11 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Planning, Coordination, and Reform

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