Abstracts & Papers in Stream 4

Pension reform still remains one of the major government agendas in South Korea, despite a series of reforms in 1998 and 2007. This paper argues that the unsatisfactory reforms were inevitable since those reform packages were based on traditional parametric reform retaining the DB (Defined Benefit) principle. Thus, this paper argues for a paradigm shift in designing the Korean pension system, which utilizes a Swedish-style NDC (Non-Financial Defined Contribution) earning-related pension plus a supplementary basic pension as an alternative model. This paper is divided into three parts. The first analyzes and evaluates the pension reforms concerning the financial sustainability. The second part discusses the current state of basic security for the elderly and recently introduced basic pension scheme, The third part combines the two reform issues and introduces a detailed framework for an NDC-based multi-tier pension system.

Full paper download: Yang J_pension reform issues.pdf

Since the first debate to introduce the National Welfare Pension Scheme in the early 1970s, the process of Korea's pension insurance reform, targeting to extend insurance coverage nation-widely, has undergone the dynamics of policy-making and change for nearly three decades. Diverse policy actors have engaged in the debates of pension insurance reform, in order to maximize their interests, making the process of the debates very turbulent and sometimes paralyzing. It is of course that the social and political contexts have greatly changed during the periods of debates. Researchers, at least, can confirm five stages of debates during the long standing turbulences of Korea's pension insurance reform process and this gives them a great chance to compare the dynamics of Korea's pension politics over time. The following are the main debates of pension insurance reform that can be comparatively analyzed:

  1. Formation and frustration of the National Welfare Pension Scheme in 1973 (the Park Chung-hee administration)
  2. Enactment of the National Pension Act in 1986 and the inauguration of the National Pension Scheme for the employed in 1988 (the Chun Doo-hwan administration)
  3. Extension of pension coverage to the rural self-employed in 1995 (the Kim Young-sam administration)
  4. Extension of pension coverage to the urban self-employed in 1999 (the Kim Dae-jung administration)
  5. Pension insurance reform in 2006-2007 under the Rho Moo-hyun government.

Against these backdrops, this article aims to analyze the dynamics of pension insurance reform in Korea, putting a special emphasis on the comparison of the five sub-cases of the debates on pension insurance reform. For the aim, this article intends to establish the comprehensive analytical framework combining relevant theoretical perspectives, such as policy networks and advocacy coalitions, in order to adequately explore the dynamics of Korea's pension insurance reform from the viewpoint of process-oriented perspective. The following are the research questions that this article tries to answer through the longitudinal comparative analysis of the pension insurance reform process of Korea.

  1. How have the policy contexts been changed over time and in what ways have they influenced the dynamics of pension insurance reform?
  2. How, and why, have the attributes and types of pension insurance policy networks changed over time? Which interests have dominated the policy networks?
  3. In what ways have policy actors established advocacy coalitions within policy networks and how have these coalitions interacted with each other?
  4. What have been the belief systems, interests and strategies of main policy actors?
  5. What have been the policy outcomes of each stage of pension insurance reform and whose interests have been mainly reflected in policy outcomes?
  6. To what extent do the differences in pension insurance policy networks explain the differences in policy outcomes?

Full paper download: Kim S_politics of pension insurance reform.pdf

After severe debates for over a decade, Taiwan finally enacted the National Pension Act in July 2007. The National Pension scheme, to be in place in October 2008, covers those who are not protected by employment-based social insurance schemes. It is a great achievement for Taiwan's social protection system as it fills up the last piece of its old age income protection system. However, it also deepens the stratification of the system. This paper reviews the process of the enactment and argues that the idea of institutionism can explain its development. In terms of political institutions, Taiwan experienced a divided government from 2000-2008. Different opinions between the Executive and the Legislative sectors resulted in the delayed enactment of the Act. In addition, frequent government reshuffles from 2000-2008 have also created an unfavorable environment for discussions on the national pension bills. In terms of social protection institutions, given the fact that different social insurance schemes were already in place for government employees, soldiers, and labors, the government's only practical strategy for expanding pension coverage was to establish a new scheme for those not in other schemes. This paper concludes by suggesting more research to elaborate the relation between political and social protection institutions and social security reform.

In Taiwan, different from the prediction of theory of modernization, its public pension system does not completely develop with economic development. It was until the advent of democratization of the early 1990s that Taiwan's government decided to initiate an ambitious pension expansion plan to catch up with advanced welfare states. This is the so-called national pension reform ever hoped by many Taiwanese to ensure old-age security. But after that Taiwan's national pension reform gained little progress. Even though the self-professed welfare defender- Democratic Progress Party (DPP) took power in the 2000 president election, new government also could not find way out of reform impasse. In reality, there have been incompatible ideas and competing political interests amidst national pension reform. But most of existing studies seem to focus much on party competition and give scant attention to this phenomenon (Lee, 1996; Cheng et al, 1999; Lin, 2000; Shih, 2001; Fu, 2000; Chen, 2002 and 2005; Chen 2004; Chang, 2003; Lou and Chen, 2005; Cheng, 2004; Yeh, 2005; Lin, 2005). Moreover, making story complicated, the seemingly no- hope national pension legislation was unexpectedly passed in the Legislative Yuan in 2007. The latter policy development has apparently made many seemingly plausible explanations of pension predicament lose their explanatory power at present time.

In order to answer the above intriguing problems, this article emphasizes the importance of policy legacies in shaping interests and ideas of relevant policy actors. But different from previous studies, I broaden the concept of policy heritage to include functional alternatives to state pensions. In this respect, a specialized term- old-age security mix (OASM) is coined to refer to the configuration of these components. Basically, this article will be organized as follows: The first section discusses the specialties of Taiwan's national pension reform, whereas the second part develops our argument about why to incorporate OASM in Taiwan's case study. I then grasp the characteristics of Taiwan's OASM and track its change since the mid 1980s. The final section sums up how the features of OASM might affect Taiwan's national pension reform over the past 14 years.

Full paper download: Lin Y_faltering pension reform.pdf

This analysis on the pension politics centers on the roles and limitations of party politics and social consultation intermediating between the state and civil society. The mechanisms of communication between the state and civil society, namely, the political parties and social consultation, didn't work adequately regarding pension reform process. At the stage of agenda formation each political party admitted problems suggested by civil society, but the final decision was a result of transaction behind the curtain. The final decision was made purely through negotiation and transaction among the political parties and the government. In the stage, there was no room to discuss the positions of labor, capital or other social groups. The political parties could not play the role of a channel for civil society's positions to be reflected in discussions in the National Assembly, and their relation with the government was strongly influenced by bureaucrats in the Ministry of Health. On the other hand, the joint meeting of social organizations was held while the attempt of compromise among the political parties was continued in the National Assembly. The attempt of social consultation through the joint meeting of social organizations activated communication on the pension issue inside civil society. Although various interest groups and social organizations displayed the possibility of agreement based on trust, the link between the joint meeting and the government was extremely weak. The process of finding alternative plans was stopped by the Ministry of Health and Welfare. Though the ruling power had been changed due to democratization, social policy reform was controlled by 'bureaucrats'. This suggests that the reform of social policies was made through formal democratic systems but without substantial contents of democracy based on public discussions and the coordination of interests since democratization.

Full paper download: Joo E_political dynamics of pension reform.pdf