Credible pensions
Besley, T.
& Prat, A.
(2004).
Credible pensions.
(Financial Markets Group Discussion Papers 525).
Financial Markets Group, The London School of Economics and Political Science.
& Prat, A.
(2004).
Credible pensions.
(Financial Markets Group Discussion Papers 525).
Financial Markets Group, The London School of Economics and Political Science.
One of the main problems in pension policy is to develop an institutional framework that guarantees that public and private pensions promises are kept. This paper discusses how the governance of public and private pensions is key to making such promises credible. It argues that credibility concerns undermine the case for earnings-related pensions run by the state and private defined benefit plans.