Introduction

A spectre of marketisation is haunting mandatory social security around the world. There has been a profound shift over the last 20 years in the ideology underpinning statutory social security provision from collective to individual responsibility (Dixon, 1999; Dixon and Hyde, 2001). The objectives of this chapter are threefold: first, to identify the driving forces behind the global push for the marketisation of statutory social security; second, to provide a global perspective on the market provision of mandatory social security; and third, to explore the challenges facing governments that see marketisation to be at least a part of the panacea for their perceived social security ailments.

The market’s global push to appropriate social security

The driving forces behind the global push for the marketisation of statutory social security come from public social security being perceived as a significant cause of budget deficits, which are considered a major barrier to economic growth, although this is seen by some as a smokescreen to hide the resultant redistribution of power and resources away from workers to capitalists that inevitably follows marketisation (Dixon and Hyde, 2001).

To some analysts the explanation for the observed increased in market-oriented statutory social security reform across a diversity of jurisdictions is the product of unsustainable fiscal pressures that have been engendered by the state’s prior permissive commitment to public provision. This major cause of public expenditure growth over the last 30 or so years is a consequence of the juxtaposition of three factors (Cantillon, 1990; Carter and Shipman, 1996; Dornbusch, 1997; Glennerster and Hills, 1998; Gustafsson and Klevmarken, 1988; Hagemann and Nicoletti, 1989; ILO, 1989; Jordan, 1996; MacKeller and Bird, 1997; Rosa, 1982a, 1982b; Simanis, 1989). The first is population ageing associated with the post-war baby-boom, increasing life expectancy, and declining fertility rates. The second is a slowing down of economic growth. The third is the emergence of intractable unemployment levels. Addressing this escalating public social security cost burden in the face of a diminishing workforce constitutes the supreme challenge. The prophets of doom, with their rhetoric of crisis and their “doom-laden tracts” (Littlewood, 1998, p 1), assert (with a certainty that belies the complexities of the constellation of political, economic, demographic and social dimensions that impact on public social security policy) that without radical market-oriented reform its future is bleak.