The politics of interest representation: Social welfare reform in Poland, Hungary and the Czech Republic

How do domestic and international political pressures interact to produce policy outcomes? What does this interaction tells us about the status of democracy in countries undergoing political and economic transition? This research addresses these questions in the context of efforts to reform the communist-era pension systems in Poland, Hungary and the Czech Republic. Although no one suggests that domestic politics is unimportant, the dominant explanations in the literature focus on the role of structural factors and the influence of the World Bank without fully explaining the role played by domestic political forces. To address this shortcoming, I integrate the international pressures emanating from the Washington Consensus with an analysis of domestic interest representation. In terms of the latter, I argue that the privatization of state-owned assets not only shaped attitudes towards pension reform, but also affected the ability of like-minded individuals to collectively organize in support of their interests. To assess this argument, I combine the distributional consequences of privatization with a model of collective action to derive hypotheses about which groups are likely to organize and garner political representation. These hypotheses are then tested by tracing the legislative and lobbying efforts in each country. By focusing on interest representation, this research complements and expands our understanding of both how democracy functions in Central and Eastern Europe, and how it interacts with international forces.