historical arguments for universal pensions

[This] article looks at the arguments for establishing universal old age pension systems in three selected countries, all belonging to the group of pioneer countries in this respect: Canada, Mauritius and Norway. Historical arguments for universal pension systems in these countries are presented and compared. The ambition to reduce poverty was an important motivation in two of the countries, but the main consideration cutting across all three countries was the moral aversion to means-testing and the desire to respect human dignity. Another argument found in all three countries was the pragmatic one that a universal scheme would lead to a reduction of the administrative cost of old age provision. ….

Our conclusion is that the arguments for universal pension schemes tend to include strong normative ideas about equality, social justice, solidarity and human dignity. In light of the argument of Holzmann and Hinz ([World Bank] 2005) that universal basic pensions are too costly to introduce in African low-income countries, it is of interest to note that universal pensions were in fact considered affordable and given priority in the poor country of Mauritius, and also in the early, difficult economic post-war period in Norway, when many consumer goods were rationed and the country qualified for and received Marshall aid. This early history indicates that political and other considerations can outweigh strict fiscal concern, and might offer a lesson for current debates. Affordability is a question of politics as much as a question of economics. ….

Common knowledge has it that universal schemes are more likely to gain support and be introduced in ethnically and culturally homogenous societies, such as the Nordic countries. But Mauritius is a good example, and Canada as well, of the limits of this ‘knowledge’. Perhaps one could even argue that universal schemes are politically wise in heterogeneous, multi-ethnic societies if a political goal is to avoid social tensions and prevent or lower the risk of ethnic discrimination.

Nanna Kildal and Stein Kuhnle, “Old age pensions, poverty and dignity: Historical arguments for universal pensions“, Global Social Policy 8:2 (2008) pp. 208-237.

[This wonderful paper is highly recommended. The authors are at the University of Bergen (Norway) and the Hertie School of Governance (Berlin), respectively. An ungated version, with the title “Universal old age pensions: Arguments at time of introduction in Canada, Mauritius and Norway”, is posted here.

Recycled from the TdJ archive (links updated).

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