Pension Reform, The Stock Market, Capital Formation and Economic Growth: A Critical Commentary on the World Bank's Proposals
AbstractProposing far-reaching reforms to the pension systems, the World Bank has recently suggested that the existing pay-as-you-go pension systems in many rich as well as poor countries, should be replaced by fully funded, mandatory, preferably private pensions, as the main pillars of the new system. It argues that these reforms will not only benefit the pensioners, but also enhance savings, promote capital formation and economic development. This paper provides a critical examination of the Bank's theses and concludes that it has adopted a one-sided view of the relationships between the key critical variables. The proposed reform may therefore neither protect the old nor achieve faster economic growth.
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Bibliographic InfoPaper provided by Schwartz Center for Economic Policy Analysis (SCEPA), The New School in its series SCEPA Working Papers with number 1996-03.
Length: 35 pages
Date of creation: Apr 1996
Date of revision:
pension system; World Bank; economic growth;
Find related papers by JEL classification:
- E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
- I10 - Health, Education, and Welfare - - Health - - - General
- G1 - Financial Economics - - General Financial Markets
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