Individual funded pension accounts and the World Bank: evolving views

Barr, Nicholas ORCID: 0000-0002-5325-2055 (2023) Individual funded pension accounts and the World Bank: evolving views. Ubezpieczenia Społeczne. Teoria i praktyka, 156 (1). pp. 1-13. ISSN 1731-0725

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Abstract

Introduction: This paper sets out a brief history of World Bank involvement in pensions. Section 1 considers the period 1980–2000, and in particular a major pension reform in Chile in 1981 and the World Bank’s support for that approach, discussing the reforms and how well, or otherwise, they performed. Section 2 explains increasing diversity of views within the World Bank, and section 3 the more balanced view of recent years. Objective: The main goal of the presented article is to provide a comprehensive analysis of the evolution and controversies surrounding individual funded pension accounts, with a primary focus on the Chilean model and its global impact. The article aims to critically examine the historical context, the World Bank’s role, internal and external debates, and recent developments in pension policy. Ultimately, it seeks to foster a more balanced understanding of pension systems, acknowledging their complexities, objectives beyond consumption smoothing, and the need for responsive policy adjustments in the face of real-world challenges. Materials and methods: The analysis is based on historical and policy documents, literature review, comparative analysis, qualitative assessments, and policy evaluation. Results: The main conclusion of the article is that the widespread adoption of individual funded pension accounts, as championed by the World Bank and initially implemented in Chile, has faced significant challenges and limitations. While these accounts were promoted as a panacea for pension reform challenges, the article argues that they have not lived up to their promises. Issues such as incomplete coverage, inadequate pensions, high administrative charges, gender inequality, and fiscal transition costs have raised concerns. The article also highlights a shift in recent years toward a more balanced and comprehensive approach to pension policy, emphasizing the importance of addressing poverty relief and broader social protection objectives.

Item Type:	Article
Additional Information:	© 2023 Ubezpieczenia Społeczne
Divisions:	European Institute
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HG Finance
JEL classification:	G - Financial Economics > G2 - Financial Institutions and Services > G20 - General
Date Deposited:	23 Nov 2023 11:03
Last Modified:	01 Apr 2024 08:40
URI:	http://eprints.lse.ac.uk/id/eprint/120836

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