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The ghost in the machine: pension risks and regulatory responses in the United States and the United Kingdom

Mabbett, Deborah (2012) The ghost in the machine: pension risks and regulatory responses in the United States and the United Kingdom. Politics & Society 40 (1), pp. 104-126. ISSN 0032-3292.

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Official URL: http://dx.doi.org/10.1177/0032329211434692

Abstract

The US has introduced automatic enrollment into retirement savings schemes, and the UK is in the throes of doing so. The financial crisis has reminded us that returns on these schemes can be poor, even negative. Behavioral economics shows that people can be ‘nudged’ into schemes regardless, but it also implies that the liberal account of market legitimation through informed choice cannot be applied. This article examines how risks are assigned in schemes and how enrollees might seek recourse if their expectations are disappointed. Comparing the US and the UK, it argues that enrollees are more likely to seek recourse from the government in the UK. The explanation can be found in regulatory decisions that reflect the structure of each country’s public pension scheme. This structure is conducive to private risk-bearing in the US but not in the UK, suggesting that regulatory market liberalism is undermined by a residual approach to public provision.

Item Type: Article
Keyword(s) / Subject(s): behavioral economics, ‘nudge’, automatic enrollment, regulation, pensions
School or Research Centre: Birkbeck Schools and Research Centres > School of Social Sciences, History and Philosophy > Politics
Depositing User: Professor Deborah Mabbett
Date Deposited: 06 Dec 2012 12:33
Last Modified: 17 Apr 2013 12:33
URI: http://eprints.bbk.ac.uk/id/eprint/5679

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