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The Politics of Parliamentary Pensions in Western Democracies

Understanding MPs’ Self-Imposed Cutbacks

Anna Caroline Warfelmann

The author takes a close look at the politics of parliamentary pensions in Australia, Austria, Canada, and Germany and enlightens the reasons of self-imposed cuts by Members of Parliament. Members of Parliament in western democracies have been under growing pressure since they legislated first retrenchments of national social security systems. They are in a special situation because they have to decide about their own financial situation as well. Thus, it is surprising that they cut their own pension benefits in recent years. The book shows that the self-imposed cuts by Members of Parliament were related to public pension reforms but, in general, were less substantial.
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1 Introduction

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The privileges politicians enjoy are a recurring topic of domestic political conflicts and discussions. Hood and Peters stress that politicians’ remuneration goes, “as close as any issue can do to the heart of the relationship between rulers and the ruled” (Hood & Peters 1994: 1). In particular, the remuneration and compensation of both active and retired parliamentarians seem to be at the core of all debates dealing with MPs’ privileges. Historically, there have always been disagreements about parliamentary remuneration and as Eschenburg points out, malicious exaggerations of these benefits have tended to characterize the conflict about political pay since the very beginning, when it was first introduced in Classical Athens (Eschenburg 1959: 17).

This topic is a rather sensitive political issue that occasionally resurfaces on the political agenda in representative democracies – where constituents elect representatives who decide on their behalf, as well as for themselves. According to popular opinion, the ‘political class’ is primarily interested in making decisions based on their own interests that will line their own pockets, regardless of the social problems currently at hand. Consequently, the privileges MPs receive (either subjectively perceived by the public or indeed real) contribute to the public’s low level of trust in their representatives. An international survey that measured people’s degree of trust in different professions corroborates this trend. Among nearly 20 occupational groups, politicians are the occupational group consistently given the lowest trust ratings in recent years in 15 EU countries, as well as in the USA,...

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