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was started in relatively poor countries (Sweden in the early 1930s, Britain after World War II), with the intent of overcoming deep social cleavages.

The importance of nation building or community building is not out of place in this discussion of trends in the "new democracies." People in these countries have undergone the alienating and atomizing experience of totalitarianism.2 In addition, current societal processes are producing a number of divisive tendencies, such as the spontaneous emergence of new social classes and groups with divergent or opposed interests, increases in inequalities of wealth and income, and the great divide between those with a job and the unemployed. Although social policy will never eliminate these new cleavages, appropriate measures can soften the edges. However, current trends in social policy reform neither endorse nor promote such efforts. Some of the reforms may accelerate these divisive processes, and it appears likely that a two-tier health and educational system will emerge in the post-communist states.

A particularly divisive strategy seems to be the rejection of the former unwritten contract between generations. While many deny the legitimacy or rationale for such a contract, which they largely deem fictive, there are many rational reasons to maintain it (Kohli, 1993; Walker, 1996). Judging from a recent Eurobarometer survey, the majority of citizens in Western countries have no intention of reneging on this obligation. When asked whether they agreed with the statement "Those in employment have a duty to ensure, through contributions or taxes, that older people have a decent standard of living," 85 percent of the respondents in 12 countries agreed, either strongly or slightly. Only 15 percent disagreed slightly or strongly (reproduced in Walker, 1996:4).

In the Central and Eastern European countries, however, changes in family benefit schemes and pension reforms (both those that have been adopted and those still under consideration) tend to undermine the intergenerational contract. This contract implies a continuity between generations and a common stake in the process of social reproduction. The abolition of universal family benefits has already damaged one side of this contract. Providing help only to the truly needy involves an institutionalized differentiation among children. It also makes it clear that the community does not see all children as potentially equal future social actors.3

The other side of the contract is even more problematic. Space here does not permit discussion of the intricacies of the two- and three-pillar schemes that are now on the agenda everywhere (one of the most elaborate versions is to be found in World Bank, 1994). The relative merits and demerits of pay-as-you-go versus funded schemes are also not particularly relevant from the


There has been relatively little attention to how adversely totalitarianism affected spontaneous microsolidarities and how it atomized society by confining freedom to the narrowest private sphere (if it was permitted at all).


Not all forms of lowering family benefits would have harmed the generational contract (see World Bank, 1996b, proposals for group targeting and benefit taxing).

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