Abstract

Reforms are meant to change people's behavior. Their effectiveness crucially depends on citizens recognizing and generally accepting their necessity, general design and «sense of direction». Without basic understanding by citizens, reforms risk having little or no effect or being reversed. This is particularly true of pension reforms because of their profound impact on people's life plans. The 2011 Italian pension reform is a case in point. The reform, approved in a financial emergency, represented the completion, strengthening and acceleration of a twenty-year-old reform drive and was meant not only to achieve the pension system's financial sustainability but also to rebalance intergenerational economic relationships. Its «social investment» dimension was however inadequately recognized and supported by social and political forces. A stronger endorsement by political forces and more widespread economic financial literacy are essential in order for the medium-long term goals of the reform not to be prejudiced.