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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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3 Analytical Framework

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As the self-restriction behavior of members of parliament regarding their own pensions has not been extensively analyzed, I develop my own analytical framework in this chapter to examine the phenomenon. I apply different theoretical approaches that shed light on various aspects of the object under study, which guide the theoretical explanations that serve as working hypotheses for the analysis of parliamentary pension politics in the country chapters that follow.

3.1 Theoretical Approaches

Members of parliament are in the unique position of being able to determine the remuneration to which they are entitled both during as well as after legislative service (see also Chapter 2). MPs have three key options for dealing with their own financial compensation during times of austerity with public pension benefits, which can be related to different concepts. First, the concept of the Sociology of Professions (3.1.1) and the principal-agent approach (3.1.3) offer explanations about MPs’ interest in maintaining the status quo rather than retrenching their own benefits: Only in the event of (massive) public criticism or through the functioning of so-called ‘control mechanisms’ do cutbacks become likely. Second, striking a balance between public and parliamentary pension reforms is embodied in the concept of responsiveness (3.1.2): Self-imposed cutbacks are implemented alongside public pension reforms in order for representatives to position themselves on par with citizens. Third, the principal-agent model does not only offer arguments about MPs’ interest in maintaining privileges. This approach and a ‘reverse-Pierson’ argument (3.1.4) are considered to be...

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