Welfare State Classification: The Development of Central Eastern European Welfare
Welfare Reform Trajectories after Collapse Communism
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| 3.3 Welfare Reform Trajectories after Collapse Communism Scholars (Cerami 2006; Hemerijck & Ferrera 2009) distinguish three waves of social policy reform after the fall of communism and thus at the beginning of the transition period. Cerami (2006) identifies three sequences of reforms after the collapse of communism, namely (1) forced expansion, (2) attempts at privatization, and (3) re-adjustment (Cerami 2006: 21). The first sequence included the temporary growth of welfare provisions called to help the democratic transition of post- communist countries. As said above the massive unemployment which was the result of the dismissal of employees of organizations and businesses which were state-owned resulted in an expansion of social policy. Cerami argues that extensive early retirement policies were introduced, followed by the set up of relatively far-reaching unemployment and social assistance programs (Cerami 2006: 22). Besides the emergency policies described above, most Vizégrad countries took the first steps towards long-lasting welfare state reforms. More specifically, Poland started to make the first attempts to reform the pay-as-you-go systems towards a three-pillar funded pension system. At the same time, most CEE countries raised the retirement age slowly; the retirement age in former communist countries was extremely low (60 years for men, 55 for women). The health care sector was also reformed; a clear distinction between management and the financing of the system was created, as well as private practice. The most important health care reform was the reintroduction of health insurance (Cerami 2006: 22). When looking at unemployment, the most important developments can be considered to be the establishment of social safety nets and the introduction of unemployment insurance. The temporary maintenance of extensive family benefits was considered to be a effective way to target the poor (Cerami 2006). All in all, the first sequence of social reforms in the Vizégrad countries consisted of emergency policies which were meant to tackle the problems resulting from the transition from a communist to a liberalized market economy. At the same time, in the first sequence the first steps towards long-lasting welfare reforms were taken. The second sequence of reforms consisted of attempts at privatization. These attempts needed to be made, mainly due to the fact that the extensive welfare programs soon became unsustainable. Simply put, because the unemployment figures increased significantly the feasibility and fundability of the social policies were no longer guaranteed. The attempt at privatization were introduced in order to reduce the expansion of the welfare state (Cerami 2006: 22). According to Cerami (2006) the measures which were supposed to reduce the welfare state were rooted in the Bismarckian tradition. The privatization of provisions, as described in chapter 2, was sponsored by international organizations as the IMF and the World Bank. The establishment of insurance-related pension, health care and unemployment schemes was also taking place in the second reform sequence. One can consider these changes to be a optimistic vision of market-driven change. These reforms can also be 18 considered to be based on the Bismarckian welfare logic. As elaborated in the preceding chapter, Bismarckian social policy’s main aim is the maintenance of employee’s income. Welfare state retrenchment took place in all Vizégrad countries. Of course, much resistance could be observed, but reform actions were addressed as urgent by both the national and international communities (Cerami 2006). Concluding, the second reform sequence resulted in the reinforcement of Bismarckian welfare institutions. The third sequence of reforms can be described as the recasting or recalibration of the neo-liberal approach which was introduced by most CEE governments. These reforms were based on the growing number of unprotected citizens which were attempting to claim social insurance funds. These social insurance funds were already suffering significant fundability and feasibility problems (Cerami 2006: 24). In Poland for example, one can observe the fact that unemployment benefits, which were still financed by employers’ contributions, are granted on a flat-rate rather than on an occupational basis. This way the pressure on the system, caused by rising unemployment could be reduced. In Slovakia, the introduction of a market oriented health system faced political resistance (Cerami 2006). In other words, the third sequence of reforms which took place in most Central and Eastern European countries can be labeled as the return towards a more Beveridgean oriented welfare system. Download 374.54 Kb. Share with your friends:
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