Path Dependency or Path Creation? Transitions in Policy Ideas and Reform Strategies in Contemporary New Zealand Pension Politics
This study investigates the uniqueness of New Zealand's pension system—a system that, for over a century, has predominantly relied on the first pillar of public pension for retirement income. It aims to uncover the underlying reasons and logic for this approach and to draw lessons for the evolution of welfare systems worldwide. Previous research has examined the issue of path dependency in welfare states but has not fully explained the peculiar phenomena of New Zealand's pension system, its diversity in development, and autonomous choices. Therefore, this paper explores the unique development path of New Zealand's pension system through institutional and cultural ideological factors. The study focuses on the privatization elements in the evolution of New Zealand's pension system, particularly the KiwiSaver scheme, to examine whether it represents a breakthrough in traditional path dependency. Adopting historical institutionalism as the theoretical framework and utilizing case studies, document analysis, and semi-structured interviews, this research deeply analyses the perspectives of 14 key figures involved in New Zealand's pension reform, including politicians, representatives of unions and employer organisations, financial industry representatives, advocates for the elderly, and academic experts. The core findings revolve around an in-depth analysis of the KiwiSaver scheme. Although the scheme established observable additional pillars in the pension system, it did not break the fundamental logic and policy paradigm of the pension system according to Hall's framework of policy change, thus cannot be considered as path creation. Moreover, the pension system in New Zealand is not entirely a result of path dependency but a combination of rational choice considerations, reflecting the government's strategic response to different pension political ecologies and embodying the country's autonomy in welfare state development against the backdrop of globalization. The study also highlights the evolution from the ideological confrontations of the two major parties on pension reforms in the 1970s to the moderate reform attempts in the 1980s/90s, and finally to the tacit consensus in the KiwiSaver project. This trajectory reflects the interaction between pension policy ideas and political systems in response to varying economic and social demands over time. Additionally, the research challenges the widespread academic notion that political systems with multiple veto points inherently limit structural reforms. The implementation of KiwiSaver in New Zealand post-MMP reform is an interesting counterexample, demonstrating that conceptual integration and "ambiguous" reform strategies can still be effective under established political systems. In conclusion, this study enriches the theory of path dependency and offers new insights into welfare state reforms from a new institutionalist perspective. Future research could further explore this field based on the institutional changes in the KiwiSaver scheme.
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