The politics of pension reform in Peru

Abstract

To date, the bulk of the research on the politics of social security reform analyzes privatization as a dependent variable and explores the political and economic conditions leading to the implementation of pension reforms. Departing from the tradition of previous scholarship, this article redirects attention to the political consequences of pension privatization by focusing on how pension reform affects social interests, and the effects of those interests on reform processes. The analysis reveals the importance of looking beyond the initial alignment of interests surrounding market reform initiatives to explore the broader political implications. In Peru, the pension reform created concentrated beneficiaries who pushed for the deepening of the reform process at the expense of costs that were widely distributed among workers in the formal sector.