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The Political Economy of Reform

Lessons from Pensions, Product Markets and Labour Markets in Ten OECD Countries

image of The Political Economy of Reform

This report examines why some policy reforms get implemented and others languish by examining 20 structural reform efforts in 10 OECD countries over the past two decades. The case studies cover a wide variety of reform attempts in three key areas: pensions, labour- and product-market regulation. Key factors in the political, economic and reform-specific arenas are identified as helping or hindering reform, and these findings are cross-checked using a relatively simple set of Spearman rank correlations. The report’s two-pronged analytical approach – quantitative and qualitative – results in unique insights for policy makers designing, adopting and implementing structural policy reforms.

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Mexico

Reform of the federal employees' pension system, 2001-07

A reform of the pensions system for federal employees administered by the federal Institute for Social Security and Social Services for State Workers (ISSSTE) was adopted in March 2007. Under the reformed system, pension contributions are channelled to individual accounts, allowing portability of pensions between the ISSSTE scheme and the general scheme. The reform was adopted with the backing of Mexico’s main public-sector unions, who had initially been strongly opposed to reform.

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