The Political Economy of State-Based Pensions: A Focus on Innovative Reforms

6. Conclusion

Facing up to the challenge of population ageing can be overwhelming for political leaders. For the developed world, the ratio of pensioners to the working age population is set to double over the next half century. Such a dramatic shift toward an older population will not occur without difficulty. Among the many challenges will be maintaining a political and economic balance between adequate retirement provision and an affordable pension contribution rate.
Two decades ago, the political prospects for addressing the pension challenge looked bleak. But in the last fifteen years, many countries have put in place reforms that have improved the long-term outlook, even if modestly. While much more reform undoubtedly lies ahead, the successful implementation of innovative approaches to state-run pensions in several countries should increase our optimism about the political prospects of addressing the remaining challenge.

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