Over the last two decades, pension reform has emerged as a central aspect of social policy development in China. In Socialist Insecurity, Mark W. Frazier analyzes pension politics in urban China. For Frazier, Chinese pension reform is characterized by a mix of welfare retrenchment and expansion that has led to a rapid increase in pension spending. However, partly because pension schemes are run at the local level without much territorial redistribution, policy expansion in urban China has reinforced social and regional inequalities instead of mitigating them. Moreover, with the acceleration of population aging, during the decades to come, the new urban pension system should become increasingly important from a fiscal and social standpoint.

The starting point of Frazier's analysis is the restructuring of state-owned enterprises (SOEs), which have shaped pension politics in urban China. In the late 1990s, for example, “the Chinese government took aggressive measures to dismantle SOEs and to invoke labor policies that would trigger layoffs and early retirements. The strategy behind SOE reform was not to eliminate public ownership but to make large SOEs profitable by shedding their responsibilities for paying pensions and other welfare to their retirees” (p. 59). Local governments have long played a key role in this reform process. According to Frazier, two main institutional factors explain this situation. “The property claims that urban governments had over SOEs and the rights of urban governments to locally raised revenue are two institutions that best account for the preferences of behaviors of otherwise reluctant urban officials and local SOEs in carrying out experiments in local pension reforms” (p.74).

During the 1990s, for local officials and the Chinese state at large, pension reform became important not only as a tool of economic change but also as a way to reduce the negative social and political consequences of SOE layoffs and restructurings. What happened in urban China was a shift of pension responsibility from SOEs, which used to allocate benefits, to local governments, which now operate public pension funds. This transfer of authority helped local officials enhance their political legitimacy by addressing the needs of the unemployed and retirees. In a context characterized by the multiplication of social protests involving the victims of SOE restructurings, “Municipal officials understood that their political careers were at risk if they failed to deliver this support to pensioners and laid-off workers” (p. 79). From this perspective, as Frazier argues, pension reform in China is closely related to state legitimacy in a society characterized by growing economic inequalities.

In order to shed a comparative light on China, Socialist Insecurity contrasts Chinese pension reform with the experience of other “large uneven developers,” especially Brazil and South Africa. According to Frazier, these three countries “responded to growing inequalities with substantial increases in pension spending and pension commitments” (p. 177). For him, these countries took this path because pension reform allows state officials to address the “social question” without systematically fighting class and regional inequalities arising from uneven development. In this context, “pensions are only a ‘quick fix’ solution that politicians can use to demonstrate their commitment to resolving inequalities” (p. 182). But in a country like China, major pension reforms have institutionalized a strong policy commitment on the part of the state that would be hard to reverse amid the growing costs generated, in part, by population aging. This is true because, as Frazier demonstrates in his analysis of public opinion and focus group data, Chinese citizens typically believe that pensions are a state-guaranteed right. Although many people know little about the reforms that reshaped the country's urban pension system during the 1990s and 2000s, they have clear expectations about the role of the state in pension policy. From an institutionalist perspective, the Chinese state has created vested interests that could make future retrenchment and restructuring efforts a risky task for state officials.

Socialist Insecurity is a concise and well-written monograph that is grounded in solid empirical research. Frazier makes good use of his rich interview and focus group material, which help him back his institutionalist claims about the political and economic logic of pension reform. His emphasis on state legitimacy and public opinion is especially revealing, and so is the comparative analysis of China and the other “large uneven developers.” However, this comparative analysis could have been much more systematic. Furthermore, the theoretical framework is hardly innovative, and it adds little to the historical institutionalist literature, at least from a theoretical standpoint. Yet, this book remains a major contribution to our understanding of social and economic policy in China. For this reason, Socialist Insecurity is must-read for scholars who are interested in Chinese public policy.