The Limits of Neoliberal Policy Feedback: Private Pension Fund Reforms in Peru (2014–2021)

A growing literature in comparative Latin American Politics highlights how policy feedback effects help explain the resilience of neoliberal reforms in the region. These works emphasize private actors/interest groups to explain neoliberal policy continuity. Nonetheless, given their focus on continuity, these works do little to explore other instances in which neoliberal feedback cannot preclude change. This paper presents an instance in which powerful private actors favored by neoliberal reforms were incapable of resisting change. An Act of the Peruvian Congress adopted in 2016 opened the door for individual pensioners to withdraw up to 95.5 percent of all their accumulated savings at the point of retirement. Ensuing reforms approved by Congress during the COVID-19 emergency (2020–2021) further weakened private administrators of these pension funds (AFPs). The case shows how the conflicting interests between private service providers and future pensioners make the service providers vulnerable; a divide also found in other neoliberal reforms.