What makes reforms likely: Political economy determinants of reforms in Latin America
AbstractThe purpose of this paper is to test the main hypotheses of the recent theoretical literature on the political economy of reform for the case of the Latin American countries between 1985 and 1995. The paper first reviews the literature and extracts the main testable hypotheses. Then, a system of indices that measure the extent of reform in five policy areas is presented. These indices are used as the dependent variables in panel regressions where the main explanatory variables are indicators of crisis, political variables and indicators of channels of contagion. We find very strong support for the well-known hypothesis that crises make reform viable and also for the (less theoretically sound) hypotheses that reforms are more likely at the beginning of government periods. None of the hypotheses on the role of political and distributional variables, the importance of compensation schemes or contagion, finds support in our results. Rather disappointingly, however, most of the reforms seem to have responded to a process of convergence.
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Bibliographic InfoArticle provided by Universidad del CEMA in its journal Journal of Applied Economics.
Volume (Year): VII (2004)
Issue (Month): (May)
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structural reforms; political economy; Latin America;
Find related papers by JEL classification:
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
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