Although pension reforms are not as salient or consequential as the economic reforms considered in the previous chapters, they likely place a close second. All communist countries ran universal pension schemes that were intended to cover the basic needs of retirees (Cook 1993). Because their societies were aging rapidly, a high percentage of citizens had a vested interest in the viability and generosity of these systems. Moreover, opinion polls showed that very large majorities of citizens believed that the state was responsible for the elderly and that pension benefits should be maintained if not increased.

At the same time, these schemes were quite expensive; often they constituted the largest single element of government budgets. Given the economic problems these countries faced, it was not clear whether governments could maintain the sort of commitments that citizens desired. And unlike economic reforms which were typically one-off decisions, pensions were an issue that had to be addressed year in and year out. The salience of pension politics and the dilemma of reconciling public support with fiscal austerity thus make it an important test of the responsiveness thesis.

How then did pension policy develop during the transition? Did politicians respond to public demands when altering the system? Or did economic and other pressures force them to engage in unpopular policy choices? More intriguing, what was behind the decision of two countries – Hungary and Poland – to partially privatize their pension systems, a reform widely believed to be out of bounds in established democracies?