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Illusion therapy: How to impose an economic shock without social pain

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  • Atashbar, Tohid
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    Abstract

    This study attempts to demonstrate how a government launched an economic structural reform plan that previous governments, fearing a serious social backlash, had been unable to implement over the course of 30 years. The findings show that the Iranian government used “illusion therapy”, a package of econo-psychological techniques, to implement IMF-backed “shock” economic reforms to long-standing energy and food subsidies, without facing the expected social reaction.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0161893811001219
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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Policy Modeling.

    Volume (Year): 34 (2012)
    Issue (Month): 1 ()
    Pages: 99-111

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    Handle: RePEc:eee:jpolmo:v:34:y:2012:i:1:p:99-111

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    Web page: http://www.elsevier.com/locate/inca/505735

    Related research

    Keywords: Illusion therapy; Shock therapy; Iran economy; Structural reform;

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    References

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    1. Tuck, L. & Lindert, K., 1996. "From Universal Food Subsidies to a Self-Targeted Program: A Case Study in Tunisian Reform," World Bank - Discussion Papers 351, World Bank.
    2. Rodney Fort, 2004. "Subsidies as incentive mechanisms in sports," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 25(2), pages 95-102.
    3. Dogruel, Fatma & Dogruel, A. Suut & Yeldan, Erinc, 2003. "Macroeconomics of Turkey's agricultural reforms: an intertemporal computable general equilibrium analysis," Journal of Policy Modeling, Elsevier, vol. 25(6-7), pages 617-637, September.
    4. Jean-Luc Migue & Richard Marceau, 1993. "Pollution Taxes, Subsidies, and Rent Seeking," Canadian Journal of Economics, Canadian Economics Association, vol. 26(2), pages 355-65, May.
    5. Bigman, David, 1987. "Targeted subsidy programs under instability: A simulation and an illustration for Pakistan," Journal of Policy Modeling, Elsevier, vol. 9(3), pages 483-501.
    6. Carter, Colin & Chadee, Doren & Darko, Kwame, 1999. "Are Subsidies to be Blamed? A Reexamination of U.S. Countervailing Duty on Hog Imports From Canada," Journal of Policy Modeling, Elsevier, vol. 21(7), pages 823-830, December.
    7. Beynon, Malcolm, 2002. "An analysis of distributions of priority values from alternative comparison scales within AHP," European Journal of Operational Research, Elsevier, vol. 140(1), pages 104-117, July.
    8. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931.
    9. Ravallion, Martin & van de Walle, Dominique, 1991. "The impact on poverty of food pricing reforms: A welfare analysis for Indonesia," Journal of Policy Modeling, Elsevier, vol. 13(2), pages 281-299.
    10. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
    11. Sterner, Thomas, 2007. "Fuel taxes: An important instrument for climate policy," Energy Policy, Elsevier, vol. 35(6), pages 3194-3202, June.
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