Tracking the Evolution of a Single Instrument Can Reveal Profound Changes: The Case of Funded Pensions in France

Paygo pension schemes are said to be difficult to transform. However, the study of the French pension system shows that progressively, funded schemes play a greater role in the transformation. This change has been possible, despite path‐dependent forces, through four sequences. First, the change is based on a diagnosis shared among most actors, which challenges the instruments chosen in the past. Second, the new instruments are chosen in opposition to the past. Third, the new measures are adopted on the basis of an ambiguous, even contradictory, agreement. Finally, the new instruments expand incrementally, but their development is leading to cumulative change and a profound transformation of both the logic and the structure of the pension system.