Welfare State Retrenchment in Central and Eastern Europe: The Case of Pension Reforms in Poland and Slovenia

This paper endeavours to shed some light on the mechanisms that led to the divergence of welfare state arrangements across Central and Eastern Europe (CEE). In particular, pension system reforms displayed a great deal of variance, which surprised both institutionalists and convergence theorists. The Polish and Slovenian cases are thus presented and compared in a political economy perspective. Theories of retrenchment, recent studies on the dynamics of CEE pension reforms and consultations with some of the relevant actors, were employed in order to account for the divergence of reform outcomes in the two countries. The study focused on three main explanations: partisan competition, the interaction between relevant external (World Bank) and internal actors (Minister of Labour and Minister of Finance) and the trade-off between power concentration and accountability concentration. The latter yielded the best explanation. While Polish reformers managed to internalise most veto actors’ reservations, Slovenian politicians excluded from consultation the country’s main trade union. Its opposition determined the rejection of radical reforms recommended by the World Bank.