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Portugal’s new framework for Intergenerational Fairness

Author: ICAEW Insights

Published: 04 Oct 2021

A new framework document aims to encourage more discussion of intergenerational fairness and provide policymakers with the tools to reshape policy design.

Intergenerational is a hot button topic when it comes to policymaking around the world. Various think tanks are looking at ways in which governments can address inequities between generations when making policy decisions, but it’s often easier said than done.

While politicians are aware of the issue and acknowledge the importance of more intergenerational fairness, short terms of office and the average age of voters make it less of a priority. 

In Portugal, for example, the median voter age is 51, so it is a struggle to get politicians to consider Intergenerational Fairness in any serious way. The Calouste Gulbenkian Foundation and the School of International Futures has produced a framework, two years in the making, to help policymakers, the media, think tanks and civil society judge the impact of public policies on current and future generations. 

One of the main objectives of this framework is to provide more information and clarity to discussions. Many laws and policies that are unfair are that way because the legacy of those laws are not taken into account. By raising awareness of the issues arising from unfair policies, it encourages all stakeholders, including voters, to consider it when making voting decisions. 

The report also provides policymakers and influencers with an assessment framework to make better judgments. This methodology was tested with real policies to ensure that it worked in a real policy designing environment. 

“The process was inspired by successful experiences in other countries, such as Japan, Singapore and Finland,” says Luis Xavier, director of strategy and planning for Calouste Gulbenkian Foundation. “They are doing some of this work and helping to create the best practice of policy assessment, risk management and strategic foresight.”

The overall methodology is made up of three primary stages: an institutional framework that pushes to increase the legitimacy of Intergenerational Fairness in representative democracy, and encourage ownership of the issue by civil society.

The second is to encourage an inclusive dialogue at a national scale, enabling a broader understanding of how inequality, privilege and exclusion are transmitted through the generations. Part of this is to identify different perspectives on the issue from the various generations and social groups. This would lead to a collective vision for what fairness for future generations looks like. 

Finally, it offers a practical policy assessment tool, with criteria to assess policy based on the aforementioned vision. This will help provide more clarity about questions of intergenerational fairness associated with each policy, along with detailed recommendations for changes to make policies more fair.

The tool involves five stages for assessing policies: the diagnostic stage involves reviewing the critical details of the policy to identify any ways it might be unfair, and its potential short, medium and long-term impacts.

The impact stage goes deeper, using data modelling to assess a policies chain of intended and unintended impacts on generations as time goes on. Scenarios is a period of stress-testing against various scenarios to ensure the policy is robust enough to survive unforeseen circumstances. 

The fourth step, process, looks at the policy design approach to ensure that intergenerational issues were considered and diverse opinions were involved in shaping it. Finally, the conclusions stage summarises the findings.

All of this is extremely necessary to ensure the sustainability of civic society. “Our social contract is in danger,” says Xavier. “We have several issues that, if left unaddressed, could be a big problem. For example, young generations cannot afford to buy a house before the age of 35/40, so they will have to pay off a significant portion of their mortgage at retirement. And as they will retire with half of the pension that they are supposed to receive, it is a time bomb waiting to go off. We have to act now.”

Politicians do want to act, but it’s difficult to enact policies without voter support. “They have a compromised system. It’s why they need a tool to help them explain why they are looking at long-term reform. 

Without proper evidence to back up this new policy approach, it’s an extremely hard sell. “It's important to take a broad approach when engaging with this. Not only the government, but also the opposition. This is more important than having a mandate a party manifesto before an election.”

Xavier hopes that this will change the conversation about intergenerational fairness at a national level, but he also wants it to have international traction. 

“It's good if we have concrete examples of laws and policies that were blocked or amended because of the framework. If this has an international reach, it's much more sustainable. We have some examples of other countries that have done this – Finland, Hungary, Israel – but they failed to have a long-term, sustainable impact. For these methodologies to be more sustainable, we need international consensus. If this helps to influence a commonly accepted framework or principles, I think it would be much more sustainable in the future.”

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