Regulatory continuity of the pension system in democracy: the role of the economic elit

Abstract

Since mid-2016, when the “No more AFP” movement took to the streets to protest against the pension system based on individual capitalisation accounts, the need for a wide-ranging reform of the pension system has remained at the top of the agenda. Nonetheless, Chile’s political system has not been able to address this issue, which has become especially salient and contentious during the COVID-driven crisis. In this context, a research question that addresses the factors explaining the remarkable resilience of the AFP system in post-authoritarian Chile has become highly relevant. This work argues that the more influential current frameworks do not offer the necessary analytical tools to understand this issue comprehensively. As such, this article suggests that the traditional, structural-instrumental analytical framework for the study of business power should be supplemented with analysis of ideational elements of power. The augmented conceptual approach developed in this research is effective in capturing long-term, strategic investments carried out by the economic elite in order to increase their power. Likewise, this novel conceptual approach is useful for understanding why the Concertación party grouping not only abandoned its original programme, but ended up actually promoting further privatisation of the AFP system.