I am currently working on several projects related to my research on financialization and the welfare state, with a special focus on the politics and policies of investment.
Sustainability through occupational pension schemes?
The influence of codetermination actors on investment strategies (2021-2023)
In this project funded by the Hans-Böckler-Stiftung, research teams in three countries will study how codetermination actors can influence sustainable investments in occupational pension schemes. Considering this topic from an international comparative perspective is of crucial importance in view of the enormous increase in investments of capital-based pensions in EU countries. However, there is a lack of studies that investigate to what extent actors of co-determination influence investment decisions and use them for non-financial purposes. Investing in sustainable activities – i.e. taking ecological, social and corporate governance aspects into account – can be a means of realizing the union goal of a sustainable and just society. It is also important to clarify which standards of social-ecological investments exist and who regulates them and how.
The planned project therefore analyzes a) what influence actors of co-determination have on investments in occupational pension schemes, b) to what extent they take into account socio-ecological aspects and c) whether the preferences expressed at the beginning of the investment chain match the final investment. Answers to this are particularly relevant for Germany in view of the increasing importance of occupational pension schemes. The comparison with the Netherlands and Denmark – both countries with quasi-universal occupational pensions, strong trade union influence and substantial sustainable investments – provides important insights and recommendations for political actors in Germany.
In this NORFACE-funded research project, research teams in 4 countries (Austria, Ireland, Spain and the Netherlands) will explore the democratic governance of capital-funded occupational pension schemes. We adopt Scharpf’s distinction between input legitimacy (are collectively binding decisions in line with citizens’ democratically expressed preferences?) and output legitimacy (do collectively binding decisions serve the common interests of the citizens?) to investigate how governments, regulators and labour market actors govern funded pensions (input legitimacy) and whether participants are satisfied with pension fund performance (output legitimacy). The project focuses on Denmark, the Netherlands, Germany, Austria, Ireland and Spain, because the structure of funded pension provision varies along key dimensions relevant to input and output legitimacy. The project combines quantitative analysis of survey data with comparative case studies based on elite and expert interviews and analysis of primary and secondary documents.
Four work packages investigate the following research questions: How does national policy define participant influence on funded pension provision? How do stakeholders use pension fund governance to influence investment policy? How have capital-funded pension schemes performed in terms of pension outcomes across European welfare states? To what extent are individual attitudes on pension investment aligned with these inputs and outputs?
The project team includes Karen Anderson (University College Dublin) as project leader, Juan Fernández (University Carlos III Madrid), Tobias Wiss (Johannes Keppler University Linz) and Natascha van der Zwan (Leiden University) as co-PIs.
Finance in the Welfare State (book project, ongoing)
Finance in the Welfare State is the first political economy of the financialization of the welfare state from a comparative-historical perspective. Finance in the Welfare State breaks ground in at least two ways. While most welfare state scholarship treats pensions as social benefits, this book takes the political choice for the financing mechanism of capital funding as its point of departure. It posits that a capital-funded pension system can best be seen as an important financial channel for workers’ savings into the public and private sectors into the economy. As pension funds grew in size, the political fates of business groups, labor unions, and the state became strongly tied to the financial performance of the pension assets. Those involved in pension governance then used the political process to try and mobilize this pool of capital to further their own interests. Capital-funding also opened up the welfare state to financial agents, whose expertise was strongly needed to navigate this new world of increasingly global financial markets. These experts have had a profound impact on the politics of the welfare state by introducing financial knowledge and ideas into the social policy domain.
Finance in the Welfare State posits that this ‘financial politics of the welfare state’ is an outcome of pension financialization, even in political economies that are institutionally distinct. The book is structured around eight chapters, that each represent critical historical moments at which policy actors within the Dutch and US welfare states recalibrated the relationship between finance and welfare. During the first half of the 20th century, these consisted of the adoption of investment rules for pension funds, the special status of public employee pension funds as financiers of the state, and the pivotal role assigned to pension funds in the development of an industrial economy. In the second half of the 20th century, each of these elements became strongly politicized, as evidenced by contentious political debates over the taxation of pension assets, the desirability of economically targeted investments, and the introduction of financial parameters into pension benefit formulae. A final chapter presents the shadow case of Germany, a welfare state with a much later expansion of funded pensions, to explore the viability of policy alternatives to financialization.
Last updated: November 12, 2020