JNNOVATIVE OLD-AGE SECURITY MODELS FOR DEVELOPING NATIONS: Chile and Brazil

L?espite the similar origins of their public pension programs, by the 1980s Chile and Brazil emerged with very different &d-age security schemes. This paper presents a comparative analysts of these two models with a focus on developments during the past twenty-jive years. Brazil has emerged as a model of how in a developing nation old-age security programs can be extended to include most of the rural population and many urban workers in the informal sector. Chile has emerged as a model of afully capitalizedpension scheme with substantialprivate sector control over pension assets. Xhe Brazilian scheme has done more than the Chilean system to reduce income inequality, but the Chilean system has done a better job than the BraziIian system for some categories of workers, particularly more affluent workers. It also has had a more positive impact on the economy, Both Chile and Brazil introduced their first public pension programs quite early relative to other developing countries and at about the same time-Brazil in 1923 and Chile in 1924. In both nations protection was at first limited to a few categories of workers that were crucial to the nations’ export-oriented ~onomies. Over the next five decades coverage was gradually extended to other categories. In both countries social security protection began as a privilege granted to particular occupational categories and by the 1970s had became a right inherent to citizenship (Abranches 1982; Santos 1985). *Direct ail correspondence lo: John B. Williamson, Department of Sociology, Boston College, Chestnut Hill. MA 02167. JOURNAL OF AGING STUDIES, Volume 9, Number 3, pages 245-262 Copyright * 1995 by JAI Press inc. Ail rights of repmdu~~ in any form reserved. ISSN: 0890465. 246 JOURNAL OF AGING STUDIES Vol. S/No. 311995 In Brazil corporatist social control goals were an important motivation behind the introduction of early policies and in the extension of coverage to certain categories of workers. Pension schemes were used by the state to co-opt and control labor ( Malloy 1979; Santos 1979). In Chile co-optation and controlled inclusion were likewise important, but so too was pressure from organized labor. In both cases periods when the state and its bureaucracy played the dominant role alternated with periods during which pressure groups representing labor were able to exert their influence and shape policy (Mesa-Lag