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Institute of Public Finance

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The Political Economy of Pension Reforms in Croatia 1991-2006

Igor Guardiancich, European University Institute, Florence, Italy

After the collapse of ex-Yugoslavia, Croatia inherited a 'premature' socialist pay-asyou-go pension system. During the early 1990s, it was used more extensively than elsewhere in Central and Eastern Europe to ease the pains of the country's transition to a market economy, thereby leaving Croatian pensions in dire need of reforms. This article will try to meticulously describe the reform process during the period 1991-2006, which was characterised by three relatively independent phases: the first, a retrenchment phase, which condemned a majority of pensioners to old-age poverty; the second, a restructuring phase, which led, under the aegis of international financial institutions, to the legislation of radical reforms; and the third, a populist phase, which undid most of the previous efforts. The article will conclude that this concoction of poverty, agency capture and crony capitalism had a common denominator, that is the struggle for power during the country's democratic consolidation.

Keywords:  Croatia, institutional change, multipillar pension systems, pension reforms, populist measures

Year:  2007   |   Volume:  31   |   Issue:  2   |   Pages:  95 - 151

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 June, 2007
II / 2007
EBSCO Publishing
ISSN 1846-887X
e-ISSN 1845-9757
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