This paper analyses the potential effects of the open method of coordination (OMC) on pension reforms in the European Union. The main results are: (1) The OMC on pensions might foster yardstick competition by providing reliable benchmarks and by improving the quality and quantity of information about successful pension policies in other member states. However, remaining difficulties in defining indicators and with data availability have to be overcome to fully develop its potential. (2) Its impact on national pension policy formation and thus on direct policy transfer will remain low. Although it provides additional input in the political decision-making process, it does not fundamentally alter the incentive structure of national political markets. Therefore, the OMC on pensions will not effectively reduce the obstacles to profound national pension reforms, but it may turn out to contribute to the development of a common EU social-policy paradigm.
Amitsis, G. , Berghman, J. , Hemerijk, A. , Sakellaropoulos, T. , Stergio A. and Stevens, Y. (2003) ‘Connecting Welfare Diversity within the European Social Model’, Background Report prepared for ‘The Modernisation of the European Social Model & E.U. Policies and Instruments’ , International Conference of the Hellenic Presidency of the European Union (May), Ioannina, Greece; accessed on 15.2.04 at: [http://www.eftrofia.gr/Social_Model_report_en.pdf].
2.
Anderson, K. M. (2002) ‘The Europeanization of Pension Arrangements: Convergence or Divergence?’, in C. De la Porte and P. Pochet, Building Social Europe through the Open Method of Co-ordination, pp. 251-283. Brussels: PIE-Peter Lang .
3.
Arrowsmith, J. , Sisson, K. and Marginson, P. (2004) ‘What can “Benchmarking” Offer the Open Method of Co-ordination?’ , Journal of European Public Policy11: 311-328 .
4.
Atkinson, A. B. , Marlier, E. and Nolan, B. (2004) ‘Indicators and Targets for Social Inclusion in the European Union’ , Journal of Common Market Studies42: 47-75 .
5.
Behrendt, C. (2002) ‘Objectives and Instruments of “Open Coordination” - Elaboration of Indicators - from a Scientific Point of View’ , in Verband Deutscher Rentenversicherungsträger (ed.) Open Method of Coordination in the Field of Pensions - Quo Vadis?, International Conference on 26 and 27 March 2003 in Berlin, Germany, DRVSchriften, Vol. 35, pp. 117-122 . Bad Homburg: WDV Wirtschaftsdienst.
6.
Behrendt, C. (2003) ‘The Role of Indicators in the Process of the “Open Method of Coordination”: Taking Stock and Looking Ahead’ , in Verband Deutscher Rentenversicherungsträger (ed.) Open Method of Coordination in the Field of Pensions - Quo Vadis?, International Conference on 26 and 27 March 2003 in Berlin, Germany, DRVSchriften, Vol. 50, pp. 81-88 . Bad Homburg: WDV Wirtschaftsdienst.
7.
Bodenstein, M. and Ursprung, H. W. (2001) ‘Political Yardstick Competition, Economic Integration, and Constitutional Choice in a Federation’, CESifo Working Paper No. 501, June 2001.
8.
Bonoli, G. (2000) The Politics of Pension Reform. Institutions and Policy Change in Western Europe. Cambridge: Cambridge University Press .
9.
Borrás, S. and Jacobsson, K. (2004) ‘The Open Method of Co-ordination and New Governance Patterns in the EU’ , Journal of European Public Policy11: 185-208 .
10.
Büchs, M. and Friedrich, D. (2005) ‘Surface Integration - the National Action Plans for Employment and Social Inclusion in Germany’, in J. Zeitlin , P. Pochet and L. Magnusson (eds) The Open Method of Co-ordination in Action: the European Employment and Social Inclusion Strategies. Brussels: PI-Peter Lang .
11.
Casey, B. H. (2003) ‘Coordinating “Coordination”: Beyond “Streamlining”’ , in Verband Deutscher Rentenversicherungsträger (ed.) Open Method of Coordination in the Field of Pensions - Quo Vadis?, International Conference on 26 and 27 March 2003 in Berlin, Germany, DRV-Schriften, Vol. 50, pp. 89-97 . Bad Homburg: WDV Wirtschaftsdienst.
12.
Chalmers, D. and Lodge, M. (2003) ‘The Open Method of Co-ordination and the European Welfare State’, ESRC Centre for Analysis of Risk and Regulation , Discussion Paper No. 11, June 2003, The London School of Economics and Political Science accessed on 15.2.04 at: [http://www.lse.ac.uk/collections/CARR/pdf/Disspaper11.pdf].
Commission (2003a) ‘Commission Recommendation on the Broad Guidelines of the Economic Policies of the Member States and the Community (for the 2003-2005 Period)’, COM(2003) 170 final, Brussels , 8 April 2003.
16.
Commission (2003b) ‘Strengthening the Social Dimension of the Lisbon Strategy: Streamlining Open Coordination in the Field of Social Protection’, COM (2003) 261 final, Brussels . 27 May 2003.
17.
Convention (2003) ‘Draft Treaty Establishing a Constitution for Europe’, CONV 850/03, Brussels , 18 July 2003.
18.
Council (2002) ‘Draft Joint Report by the Commission and the Council on Adequate and Sustainable Pensions’, COM(2002) 737 final, Brussels , 17 December 2002.
19.
Council (2003a) ‘Joint Report by the Commission and the Council on Adequate and Sustainable Pensions’, 7165/03 ECOFIN 76, SOC 115, Brussels , 10 March 2003.
20.
Council (2003b) ‘Presidency Conclusions’, Brussels European Council, 20 and 21 March 2003, (OR.en) 8410/03, Brussels , 5 March 2003.
21.
De la Porte, C. and Nanz, P. (2004) ‘The OMC - a Deliberative-democratic Mode of Governance? The Cases of Employment and Pensions’ , Journal of European Public Policy11: 167-288 .
22.
De la Porte, C. and Pochet, P. (2002) ‘Public Pension Reform: European Actors, Discourses and Outcomes’, in C. De la Porte and P. Pochet (eds) Building Social Europe through the Open Method of Co-ordination, pp. 223-250. Brussels: PIE-Peter Lang .
23.
De la Porte, C. and P. Pochet (2004) ‘The European Employment Strategy: Existing Research and Remaining Questions’Journal of European Social Policy14 (1): 71-79 .
24.
Denzau, A. T. and North, D. C. (1994) ‘Shared Mental Models: Ideologies and Institutions’ , Kyklos47 (1): 3-32 .
25.
Ebbinghaus, B. and Hassel, A. (2000) ‘Striking Deals: Concertation in the Reform of Continental European Welfare States’ , Journal of European Public Policy7: 44-62 .
26.
ECB (2003) ‘The Need for Comprehensive Reforms to Cope with Population Ageing’ , Monthly BulletinApril: 39-51 .
27.
Eckardt, M. (2002) ‘Der Einfluss der Europäischen Union auf die Alterssicherung der Mitgliedstaaten’, in H. Hegmann and B. Neumärker (eds) Die Europäische Union aus polit-ökonomischer Perspektive, pp. 329-58. Marburg: Metropolis.
28.
Eckardt, M. (2004) ‘Institutionen- und evolutionsökonomische Erklärungen des Rechtswandels’, in W. Kerber (ed.) Studien zur Evolutorischen Ökonomik IX, pp. 163-202. Berlin: Duncker und Humblot.
29.
Eckardt, M. and Kerber, W. (2005) ‘Best Practices, Yardstick Competition und Lernen in der Wirtschaftspolitik - eine kritische Analyse der Offenen Methode der Koordinierung der EU’, in W. Schäfer (ed.) Institutionelle Grundlagen effizienter Wirtschaftspolitik, pp. 121-66. Berlin: Duncker und Humblot.
30.
Eichenhofer, E. (2000) ‘How to Simplify the Co-ordination of Social Security’ , European Journal of Social Security2/3: 231-240 .
31.
EPC (2001) ‘Budgetary Challenges Posed by Ageing Populations: the Impact on Public Spending on Pensions, Health and Long-term Care for the Elderly and Possible Indicators of the Long-term Sustainability of Public Finances’, Economic Policy Committee, Brussels 24 October 2001, EPC/ECFIN/655/01-EN final.
32.
EPC (2002) ‘Reform Challenges Facing Public Pension Systems: the Impact of Certain Parametric Reforms on Pension Expenditure’, Economic Policy Committee, Brussels , 5 July 2002, EPC/ECFIN/237/02-final.
33.
EPC (2003) ‘The Impact of Ageing Populations on Public Finances: Overview of Analysis Carried out at EU Level and Proposals for a Future Work Programme’, Economic Policy Committee, Brusssels , 22 October 2003, EPC/ECFIN/435/03-final.
34.
Esping-Andersen, G. (1990) The Three Worlds of Welfare Capitalism. Cambridge: Polity Press .
35.
Feldstein, M. and Siebert, H. (eds) (2002) Social Security Pension Reform in Europe. Chicago: University of Chicago Press .
36.
Ferrera, M. , Hemerijck, A. and Rhodes, M. (2001) ‘The Future of the European “Social Model” in the Global Economy’ , Journal of Comparative Policy Analysis: Research and Practice3: 163-190 .
37.
Gruber, J. and Wise, D. A. (2002) ‘Different Approaches to Pension Reform from an Economic Point of View’, in M. Feldstein and H. Siebert (eds) Social Security Pension Reform in Europe, pp. 49-77. Chicago: University of Chicago Press .
38.
Hall, P. A. (1993) ‘Policy Paradigms, Social Learning, and the State. The Case of Economic Policy-making in Britain’ , Comparative Politics25: 275-296 .
39.
Hemerijck, A. and Visser, J. (2003) ‘Policy Learning in European Welfare States’, unpublished manuscript, Universities of Leyden and Amsterdam ; accessed on 8.9.04 at: [http://eucenter.wisc.edu/OMC/Papers/hemerijckVisser2.pdf].
40.
Hodson, D. and Maher, I. (2001) ‘The Open Method as a New Mode of Governance: the Case of Soft Economic Policy Coordination’ , Journal of Common Market Studies39: 719-746 .
41.
Holzmann, R. , MacKellar, L. and Rutkowski, M. (2003) ‘Accelerating the European Pension Reform Agenda: Need, Progress, and Conceptual Underpinnings’, in R. Holzmann , M. Orenstein and M. Rutkowski (eds) Pension Reform in Europe: Process and Progress, pp. 1-46. Washington, DC: The World Bank .
42.
Jacobsson, K. and Schmid, H. (2002) ‘Real Integration or Just Formal Adaptation? On the Implementation of the National Action Plans for Employment’, in C. De la Porte and P. Pochet (eds) Building Social Europe through the Open Method of Co-ordination, pp. 69-96. Brussels .
43.
Jacobsson, K. and Vifell, A. (2003) ‘Integration by Deliberation? On the Role of Committees in the Open Method of Coordination’ , paper prepared for the workshop on the ‘Forging of Deliberate Supernationalism in the EU’ (Feb.), Florence, accessed on 15.2.04 at: [http://eucenter.wisc.edu/OMC/open12.html%23social].
44.
Jacobsson, K. and Vifell, A. (2005) ‘New Governance Structure in Employment Policy-making? Taking Stock of the European Employment Strategy’, in J. Zeitlin , P. Pochet and L. Magnusson (eds) The Open Method of Coordination in Action: the European Employment and Social Inclusion Strategies. Brussels: PIE-Peter Lang .
45.
James, E. and S. Brooks (2001) ‘The Political Economy of Structural Pension Reform’, in: Holzmann, R. and J. E. Stiglitz (2001) New Ideas about Old-age Security. Towards Sustainable Pension Systems in the 21st Century, pp. 133-170. Washington, DC: The World Bank .
46.
Kerber, W. (2000) ‘Interjurisdictional Competition within the European Union’ , Fordham Law Journal23: 217-249 .
47.
Lundvall, B. A. and Tomlinson, M. (2002) ‘International Benchmarking as a Policy Learning Tool’, in B. A. Lundvall and M. J. Rodrigues (eds) The New Knowledge Economy in Europe: a Strategy for International Competitiveness and Social Cohesion, pp. 203-231. Cheltenham: Edward Elgar Publishing .
48.
McMorrow, K. and Roeger, W. (2002) ‘EU Pension Reform - an Overview of the Debate and an Empirical Assessment of the Main Policy Reform Options’, Economic Papers, No. 162, European Commission Directorate-General For Economic and Financial Affairs ; accessed on 15.2.04 at: [http://europa.eu.int/comm/economy_finance/publications/economic_papers/2002/ecp162en.pdf].
49.
Müller, K. (1999) The Political Economy of Pension Reform in Central-Eastern Europe. Cheltenham: Edward Elgar Publishing .
50.
Müller, K. (2003) ‘The Making of Pension Privatization in Latin America and Eastern Europe’, in R. Holzmann , M. Orenstein and M. Rutkowski (eds) Pension Reform in Europe: Process and Progress, pp. 47-78. Washington, DC: The World Bank .
51.
National Strategy Reports (2002) accessed on 5/2/04 at: [http://europa.eu.int/comm/employment_social/soc-prot/pensions/index_en.htm].
52.
Ney, S. (2003) ‘The Rediscovery of Politics: Democracy and Structural Pension Reform in Continental Europe’, in R. Holzmann , M. Orenstein and M. Rutkowski (eds) Pension Reform in Europe: Process and Progress, pp. 79-110. Washington., DC: The World Bank .
53.
North, D. C. (1990a) ‘A Transaction Cost Theory of Politics’ , Journal of Theoretical Politics2: 355-367 .
54.
North, D. C. (1990b) Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press .
55.
Oates, W. E. (1999) ‘An Essay on Fiscal Federalism’ , Journal of Economic Literature37: 1120-1149 .
56.
Oates, W. E. (2001) ‘Fiscal Competition and European Union: Contrasting Perspectives’ , Regional Science and Urban Economics31: 133-145 .
57.
Oates, W. E. (2002) ‘Fiscal and Regulatory Competition: Theory and Evidence’, Perspektiven der Wirtschaftspolitik 3: 377-90.
58.
OECD (1998) Maintaining Prosperity in an Ageing Society. Paris: OECD .
59.
Orenstein, M. (2003) ‘Mapping the Diffusion of Pension Innovation’, in R. Holzmann , M. Orenstein and M. Rutkowski (eds) Pension Reform in Europe: Process and Progress, pp. 171-193. Washington, DC: The World Bank .
60.
Pierson, P. (1994) Dismantling the Welfare State? Reagan, Thatcher, and the Politics of Retrenchment. Cambridge: Cambridge University Press .
61.
Pierson, P. (1996) ‘The New Politics of the Welfare State’ , World Politics48: 143-179 .
62.
Pochet, P. (2003) ‘Pensions: the European Debate’, in G. L. Clark , and N. Whiteside (eds) Pension Security in the 21st Century: Redrawing the Public-Private Debate, pp. 44-63. Oxford: Oxford University Press .
63.
Radaelli, C. M. (2003) ‘The Open Method of Coordination: a New Governance Architecture for the European Union?’, Swedish Institute for European Policy Studies, Rapport no. 1 (Mar.); accessed on 15.2.04 at: [http://www.sieps.su.se].
64.
Régent, S. (2002) ‘The Open Method of Co-ordination: a Supranational Form of Governance?’, International Institute for Labour Studies, Decent Work Research Programme , Discussion Paper DP/137/2002; accessed on 15.2.04 at: [http://www.ilo.org/public/english/bureau/inst/download/dp13702.pdf].
65.
Scharpf, F. W. (2002) ‘The European Social Model: Coping with the Challenges of Diversity’ , Journal of Common Market Studies40: 645-670 .
66.
Schludi, M. (2003) ‘Chances and Limitations of “Benchmarking” in the Reform of Welfare State Structures - the Case of Pension Policy’, AIAS Working Paper No. 03/10, Amsterdam, accessed on 15.2.04 at: [http://www.uva-aias.net/files/working-papers/WP10.pdf].
67.
Schmähl, W. (2001) (ed.) Möglichkeiten und Grenzen einer nationalen Sozialpolitik in der EU. Baden-Baden: Duncker und Humblot.
68.
Schmähl, W. (2002) ‘Open Coordination in the Area of Old-age Security - from the Point of View of Economics’ , in Verband Deutscher Rentenversicherungsträger (ed.) Open Method of Coordination in the Field of Pensions - Quo Vadis?, International Conference on 26 and 27 March 2003 in Berlin, Germany, DRV-Schriften, Vol. 35, pp. 101-112 . Bad Homburg: WDV Wirtschaftsdienst.
69.
Schmähl, W. (2003) ‘Initial Experience with the “Open Method of Coordination”: Open Questions Regarding “Financial Sustainability” and “Adequacy” of Pensions in an Expanded European Union’ , in Verband Deutscher Rentenversicherungsträger (ed.) Open Method of Coordination in the Field of Pensions - Quo Vadis?, International Conference on 26 and 27 March 2003 in Berlin, Germany, DRV-Schriften, Vol. 50, pp. 98-113 . Bad Homburg: WDV Wirtschaftsdienst.
70.
Schulte, B. (2001) ‘EG-rechtliche Rahmenbedingungen für nationale Sozialpolitik’, in W. Schmähl (ed.) Möglichkeiten und Grenzen einer nationalen Sozialpolitik in der Europäischen Union, pp. 9-92. Berlin: Duncker and Humblot.
71.
Scott, J. and Trubek, D. M. (2002) ‘Mind the Gap: Law and New Approaches to Governance in the European Union’ , European Law Journal8: 1-18 .
72.
Siebert, H. and Koop, M. J. (1990) ‘Institutional Competition. A Concept for Europe?’ , Aussenwirtschaft45: 439-462 .
73.
Sinn, H-W. (1997) ‘The Selection Principle and Market Failure in Systems Competition’ , Journal of Public Economics88: 247-274 .
74.
Slembeck, T. (2003) ‘Ideologies, Beliefs, and Economic Advice. A Cognitive-evolutionary View on Economic Policy-making’, in P. Pelikan and G. Wegner (eds) The Evolutionary Analysis of Economic Policy, pp. 28-61. Cheltenham: Edward Elgar Publishing .
75.
SPC (2003) ‘Mid Year Report from the Indicators Sub-group to the Social Protection Committee’, June 2003-06-02, ISG/2003/JUNE.
76.
Stanton, D. (2002) ‘Objectives and Instruments of ‘Open Coordination’ - Elaboration of Indicators - from a Political Point of View’ , in Verband Deutscher Rentenversicherungsträger (ed.) Open Method of Coordination in the Field of Pensions - Quo Vadis?, International Conference on 26 and 27 March 2003 in Berlin, Germany, DRVSchriften, Vol. 35, pp. 113-116 . Bad Homburg: WDV Wirtschaftsdienst.
77.
Stanton, D. (2003) ‘Common Indicators Relating to National Strategies for Adequate and Sustainable Pensions: the Work of the Indicators Sub-group of the Social Protection Committee’ , in Verband Deutscher Rentenversicherungsträger (ed.) Open Method of Coordination in the Field of Pensions - Quo Vadis?, International Conference on 26 and 27 March 2003 in Berlin, Germany, DRVSchriften, Vol. 50, pp. 64-70 . Bad Homburg: WDV Wirtschaftsdienst.
78.
Stone, D. (2001) ‘Learning Lessons, Policy Transfer and the International Diffusion of Policy Ideas’, CSGR Working Paper No. 69/01, University of Warwick ; accessed on 15.2.04 at: [http://www.warwick.ac.uk/fac/soc/CSGR/wpapers/wp6901.pdf].
79.
Stone, D. (2003) ‘Transnational Transfer Agents and Gobal Networks in the “Internationalisation” of Policy’ , paper prepared for the Internationalisation and Policy Transfer Workshop, Tulane University (Apr.), New Orleans; accessed on 15.2.04 at: [http://www.tulane.edu/%7Ednelson/PolTransConv/Stone.pdf].
80.
Sun, J-M. and Pelkmans, J. J. (1995) ‘Regulatory Competition in the Single Market’ , Journal of Common Market Studies33: 67-89 .
81.
Van den Bergh, R. (2000) ‘Towards an Institutional Legal Framework for Regulatory Competition in Europe’ , Kyklos53: 435-466 .
82.
VDRet al (ed.) (2003) Open Method of Coordination in the Field of Pensions - Quo Vadis?, International Conference on 26 and 27 March 2003 in Berlin, Germany, DRV-Schriften, Vol. 50. Bad Homburg: WDV Wirtschaftsdienst.
83.
Wincott, D. (2003) ‘Beyond Social Regulation? New Instruments and/or a New Agenda for Social Policy at Lisbon?’ , Public Administration81: 533-553 .
84.
World Bank (1994) Averting the Old-age Crisis: Policies to Protect the Old and Promote Growth. Washington, DC: The World Bank .
85.
Zeitlin, J. (2002) ‘The Open Method of Coordination and the Future of the European Employment Strategy’, Hearing of the European Parliament, Employment and Social Affairs Committee , 8 July 2002; accessed on 18/03/05 at: [http://eucenter.wisc.edu/OMC/Papers/EUC/ZeitlinEESpresentation.pdf].
