From Privatisation to Re-nationalisation: A Process Tracing Study of Funded Pension Reversals in Hungary and Kazakhstan

Abstract

This dissertation explores the causal pathway through which the mandatory funded pension schemes in Hungary and Kazakhstan were transformed. The study aims to explain how Hungary and Kazakhstan, despite their different socio-economic and political contexts, both departed from privately managed funded pension arrangements, and how socio-economic and political factors interacted to produce this outcome. Grounded in historical institutionalism, which emphasises the dynamic interplay between institutions and actors, the research employs process tracing to unpack the causal mechanisms underlying pension reform. The empirical analysis, based on a comparative qualitative approach, reveals that the institutional architecture of the funded pension pillar in both countries became politically vulnerable, making state intervention both defensible and feasible. The thesis further finds that recentralisation resulted from an interaction of factors, whereby fiscal pressure first exposed the funded pillar to challenge, political actors then turned that vulnerability into a strategically usable policy option and publicly legitimized it, and weak effective veto capacity ultimately allowed reform to be enacted in both cases. These findings have important implications for understanding pension reforms and institutional change more broadly. Methodologically, the dissertation also demonstrates the value of explaining-outcome process tracing for reconstructing minimally sufficient causal pathways and assessing rival explanations in complex reform settings. Empirically, this research offers policy-relevant lessons for countries seeking to preserve funded pension systems through stronger institutional and governance safeguards.