The politics of pension reform in Greece and Turkey: International institutions as external determinants of adjustments

Abstract

Among welfare programmes public pension schemes have been particularly subject to cost-containment. Various countries have been exposed to relatively similar pressures such as ageing populations or growing unemployment. The literature on comparative welfare states tends to highlight the significance of domestic factors in mediating the influence of these pressures. This article instead explores the policy impact of international financial institutions (IFIs) including the World Bank, International Monetary Fund (IMF) and the European Union (EU) on the reform of old-age pension systems in Greece and Turkey. It suggests that in both countries, IFIs have helped to trigger the process of reforms and to spread the global pension orthodoxy. Although the pension schemes still diverge in institutional structure and benefit provision, in both cases adoption of the pension orthodoxy of individualisation of pension rights has followed the advice tendered by the IFIs.