Institutional Degeneration of Multipillar Pension Systems The Case of Croatia

Abstract

Recent advances in institutionalist theory showed how a rigid dichotomy between typically path-dependent incremental adaptation and radical transformation fails to capture important transformative processes common to advanced political economies. Consequently, a vast uncharted territory opened up and needs to be explored. This paper fills part of this gap by analysing processes where institutional rules and practice show a high degree of resilience in spite of structural reforms. The essay proposes the concept of ‘institutional degeneration’ to capture a situation where structural transformation takes place, but where, in practice, the old institutional structures ‘contaminate’ the new institutional arrangements, thereby enabling the coexistence of old and new logics of action. The argument is empirically sustained through the investigation of the Croatian pension reform, which due to and in spite of its technically almost impeccable implementation embodies a critical example of degeneration amid comparable cases in Eastern Europe and Latin America