Trade-offs and Veto Players: Reforming Pensions in France and Italy

Abstract

France, like other European countries, has faced growing challenges to its welfare state. Pensions in particular have been at the core of the public debate on recasting its ‘social model’. This article analyses reform processes in the 1990s and early 2000s to explain ‘how France reforms pensions’. While in other Bismarckian welfare states with pay-as-you-go pension systems, reform is usually undertaken via concertation; in France it is formulated by the government alone. Yet even in the French case of state-led policy-making, where the institutional preconditions for corporatism are weak, the political elite needs to adopt a consensual policy making style to overcome trade union veto powers. The Balladur pension reform of 1993 is used to explore this apparent contradiction between a unilateral approach and a consensual style, with an extension of the argument to the 2003 Raffarin reform. A comparison with Italy — a case of consensual, concerted pension policy-making — sheds light on ‘la voie francaise’ to distributive policy reform.