Poland: Social protection and the pension system during the transition

Abstract

This paper argues that the brunt of the transition‐induced increase in Polish social protection expenditures during 1989‐93 has been borne by social insurance arrangements, particularly pensions, rather than by social assistance schemes targeted to the poor or more temporary social safety net schemes. This is largely due to ease of access to social insurance and its more attractive benefit structure. Much of the recent efforts to reform social protection arrangements had an ad hoc nature and was driven by the need to alleviate looming financial distress. A major policy challenge is to avoid further burdening the social insurance system, particularly pensions, by problems that should be addressed by basic income support and emergency assistance policies or by general transfers (e.g. family allowances). Current reform needs are illustrated by using the pension system as an example.

WELFARE IDEOLOGY, THE MARKET AND SOCIAL SECURITY: Towards a Typology of Market‐Oriented Reform

“…The legacy of Authoritarian Reluctant Individualist ideology is the challenge of dismantling an inherited social security system, once the envy of many, but which can now no longer be afforded, while still preserving a safety net for the vulnerable that does not have gaping holes, and without loosing political power, which means also addressing Sztompka's (1996: 38) prevalent syndrome of distrust, particularly of public institutions (Deacon and Szalai, 1990;George, 199 1 ;Paul, 199 1 ;Myles and Brym, 1992;Barr, 1994;Maret and Schwartz, 1994;Zukowski, 1994;Myles, 1996). The policy response engendered is to reconfigure public social security provision by imposing employee contributions and means tests, and by introducing incentives (especially tighter eligibility criteria and reduced benefit generosity) that promote work engagement wherever possible; and to compliment, or even replace, distrusted public provision with market provision.…”