Pension Reform in Switzerland

Silja Haeusermann of the University of Zurich drops some political science:

In the 1990s, Paul Pierson made a huge impact in the field when he explained how difficult it would be for governments to consolidate or retrench existing social policy programs, because these policies (pensions being the best example) create their own support coalition that reaches far beyond the left-wing electorate. On this basis, he predicted policy stability. More recent research, spearheaded by Swiss political scientist Giuliano Bonoli, proved him wrong by demonstrating that reforms could be achieved, under the condition that governments combine cutbacks with elements that benefit the most precarious social groups, mostly low-skilled, young and female voters. In a book that will be out with CUP this month, I have shown that this kind of “package deals” has become a necessary condition for successful pension reforms over the last 20 years, not only in Switzerland, but also in Germany, France and other European countries. The 2003 reform of the pension scheme in Switzerland, for example, did combine the same kind of occupational pension cutbacks that were rejected on Sunday with more generous protection of low-income earners. This combination led to a two-dimensional reform space that allowed for a very broad support coalition among parties and interest organizations of both the left and right (all actors in the green ellipse). The Swiss Union of Trade Unions SGB (the only actor consistently critical of the reform package) had learnt in earlier campaigns that it would be hardly possible to win a popular referendum all on their own, with part of the left supporting the reform.

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More recently the Swiss right, emboldened by a good showing in parliamentary elections, tried to implement some straight-up cuts only to find themselves overwhelmingly rejected at the ensuring referendum. It’s a pattern that will be familiar to any observers of the 2005 Social Security privatization fight. Pierson’s research is why we should be confident that things like the filibuster are not necessary to preserve the welfare state. Simply put, welfare state rollback is nearly impossible to achieve. The NHS is still in place in the UK, and Medicare in place in Canada, and not because those countries’ respective center-right parties never won elections.