Content
1. Abstract …........................................................................................................ 2
2. The OMC – An Overview …............................................................................ 3
2.1. The Open Method of Coordination –Decentralized Coordination …... 3
2.2. The Actors Involved …......................................................................... 6
3. The OMC and the Old-Age Security System .................................................. 7
3.1. Bismarck vs. Beveridge ….................................................................... 7
3.2. Different Approaches on the Old-Age Security Issues …..................... 8
4. Examples of Pension Systems …..................................................................... 10
4.1. Germany …........................................................................................... 10
4.2. Sweden …............................................................................................. 12
5. Conclusion …................................................................................................... 13
6. References ….................................................................................................. 14
1
Table of Contents
1. Abstract
2. The OMC – An Overview
2.1. The Open Method of Coordination –Decentralized Coordination
2.2. The Actors Involved
3. The OMC and the Old-Age Security System
3.1. Bismarck vs. Beveridge
3.2. Different Approaches on the Old-Age Security Issues
4. Examples of Pension Systems
4.1. Germany
4.2. Sweden
5. Conclusion
6. References
Objectives and Research Themes
This paper examines the role and effectiveness of the Open Method of Coordination (OMC) as a policy instrument within the European Union, specifically focusing on its application to old-age security and pension system reforms.
- The functionality and mechanism of the Open Method of Coordination (OMC)
- Mapping the primary European actors involved in OMC-led policy processes
- Comparative analysis of Bismarck versus Beveridge models in social security
- Evaluation of pension reforms in Germany and Sweden
- Assessment of whether the OMC acts as an effective catalyst for national social reforms
Excerpt from the Book
3.1. Bismarck vs. Beveridge
The system of social security and especially the old-age security in most countries of the EU differ not only in their organization, but also in their conceptions and aims.
The two main distinctions of conceptions are being made between the Bismarck and the Beveridge type, on which most European member states' social-security systems are still based, each one having their own particularities, of course.
According to the Bismarck type, the financing of the social security system is being carried by employers as well as by employees, the benefits are salary linked. This means, that only those individuals who have had a well-paid job are fully benefiting from the social security system and are able to maintain their living standard after retirement, whereas the individuals without a previous well-paid job have to cut back. It is a form of solidarity between workers (Esping-Andersen 1990; Sommer 2003: 6f., Eckardt 2005: 247f.).
While according to the Beveridge type, not only the workers, but the entire population benefits from the social security system, which is tax based. The benefits are not correlated to the previous sallary, the sum each individual recieves after retiring or in case of sickness of unability to work is the same for everyone (Esping-Andersen 1990; Sommer 2003: 6f.). This shows that social security systems can also be differentiated according to their aims. Either the aim is to maintain the standard of living (Bismarck approach) or to fight poverty (Beveridge approach).
Summary of Chapters
1. Abstract: Provides an introduction to the concepts of social security harmonisation and convergence, and outlines the research objective regarding the OMC's impact on old-age security.
2. The OMC – An Overview: Defines the OMC as a "soft law" policy-making instrument initiated in 2000, focusing on flexibility, subsidiarity, and benchmarking through "learning-by-seeing".
3. The OMC and the Old-Age Security System: Discusses the theoretical foundations of social security types and the specific challenges—such as demographic shifts and labor market changes—facing European pension systems.
4. Examples of Pension Systems: Compares the reform paths of Germany and Sweden, evaluating their respective success in adapting to demographic pressures via different pension models.
5. Conclusion: Critically evaluates the OMC's performance, noting a lack of transparency and significant influence, and suggesting that true long-term stability may require more than just "on the spot" reforms.
6. References: Lists the academic sources, reports, and policy documents used to support the analysis of the OMC and pension reforms.
Keywords
Open Method of Coordination, OMC, Old-age security, Pension systems, European Union, Bismarck model, Beveridge model, Social policy, Demographic change, Soft law, Subsidiarity, Convergence, Retirement, Public spending, Best-practice
Frequently Asked Questions
What is the core subject of this paper?
The paper investigates the Open Method of Coordination (OMC) and its application as a governance tool within the European Union, specifically regarding the modernization and reform of national old-age security systems.
What are the central thematic areas?
The research covers the mechanisms of the OMC, the distinction between Bismarck and Beveridge social security models, and the challenges posed by an aging population to European welfare states.
What is the primary research objective?
The goal is to determine if the OMC is a successful instrument for fostering convergence in pension reforms or if it acts as a "hidden agenda" with limited impact on national legislative processes.
Which methodology is employed in this research?
The work utilizes a qualitative comparative approach, analyzing policy reports from the European Commission and the Economic Policy Committee, and reviewing academic literature on governance models.
What topics are discussed in the main body?
The main body covers the definition and origin of the OMC, the roles of EU institutions in decision-making, the theoretical classification of pension systems, and a comparative case study of German and Swedish reform efforts.
Which keywords characterize this work?
Key terms include Open Method of Coordination, Old-age security, Pension systems, Soft law, and demographic change.
How does the author view the "Bismarck" versus "Beveridge" systems?
The author distinguishes them by their primary aims: the Bismarck approach focuses on maintaining the living standard of workers, while the Beveridge approach prioritizes poverty alleviation for the entire population.
What did the analysis of Germany and Sweden reveal?
The author concludes that despite various reforms, neither country serves as a perfect example of OMC-driven success, and that both face significant long-term pressures due to aging populations.
What is the author's final verdict on the OMC?
The author expresses skepticism, noting that the OMC suffers from a lack of transparency and public participation, and that its actual impact on national reforms has been minimal so far.
- Quote paper
- M.A. Michelle Pro (Author), 2011, The Open Method of Coordination - Friend or Foe?, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/208341
