The emergence of redistributive pensions in the developing world

Pension schemes that redistribute money to the elderly have seen a remarkable surge in developing countries. To explain this phenomenon we build a political economy model of a Beveridgean pay-as-you-go so-cial security system which incorporates family transfers driven by costs of non-compliance to a social norm. For appropriately chosen weights of a political support function a government will install a pension sys-tem and increase its generosity if the share of the urban population rises, productivity differentials between urban and rural workers widen, or if the social norm erodes