Welfare Retrenchment as Social Justice: Pension Reform in Mexico

Abstract

AbstractThis article analyses critically the applicability of current theories of welfare state retrenchment to the 2004 public pension reform in Mexico, with the 1995 reform acting as a complementary case. In particular, this article contributes to the literature by analysing the reasons for which a potentially unpopular reform was successfully enacted. Available evidence suggests that – contrary to the existing literature's assertions – Mexican politicians responsible for the 2004 reform sought credit for these changes, rather than to avoid blame. Also, by presenting the reform as necessary to enhance socioeconomic equality, politicians were able to gather substantial popular support and defeat labour unions opposing this pension restructuring process. Hence, we propose that by framing the public debate as a matter of social justice, promoters of pension reform increased significantly popular support for the retrenchment of important benefits from a core group of civil servants, and successfully pressured Congress to promulgate this reform. We suggest that this created a reform path that will facilitate future efforts at reforming the remaining public pension schemes in Mexico.