Why Do Some Countries Undertake Structural Reforms When Others Do Not? Evidence From The Oecd And Emerging Market Economies
AbstractIt is widely accepted that structural, institutional and labour market reforms are essential for the development of the OECD and emerging market economies; and that argument has been incorporated into official policy in the EU as part of the Lisbon agenda. Yet there is little analysis in the economics literature of how these reforms should work, or of which reforms would be most effective. Similarly, there is no explanation of why policy makers extol the virtues of reform, but often fail to carry them out. Or why some countries embrace reform, but others in similar circumstances do not. To explain these differences we develop a general equilibrium model with imperfect competition, extended to include labour market imperfections and tax distortions. We find that fiscal constraints to be the principal reason that reforms do not get undertaken, though labour market regulation can be a serious complicating factor in certain cases. As a result, the reduction of tax distortions, rather than market or institutional reform, is usually the most effective type of reform. The implication is that we need models that combine different reform instruments and different distortions to analyse this kind of problem.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by World Scientific Publishing Co. Pte. Ltd. in its journal Journal of International Commerce, Economics and Policy.
Volume (Year): 01 (2010)
Issue (Month): 01 ()
Contact details of provider:
Web page: http://www.worldscinet.com/jicep/jicep.shtml
Find related papers by JEL classification:
- J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ogaki, M & Reinhart, C-M, 1995.
"Measuring Intertemporal Substitution : The Role of Durable Goods,"
RCER Working Papers
404, University of Rochester - Center for Economic Research (RCER).
- Masao Ogaki & Carmen M. Reinhart, 1998. "Measuring Intertemporal Substitution: The Role of Durable Goods," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 1078-1098, October.
- Reinhart, Carmen & Ogaki, Masao, 1995. "Measuring intertemporal substitution: The role of durable goods," MPRA Paper 13690, University Library of Munich, Germany.
- Nikola Bokan & Andrew Hughes Hallett, 2006.
"Labour and Product Market Reforms in the Economy with Distortionary Taxation,"
CDMA Working Paper Series
200604, Centre for Dynamic Macroeconomic Analysis.
- Bokan, Nikola & Hughes Hallett, Andrew, 2006. "Labour and Product Market Reforms in the Economy with Distortionary Taxation," CEPR Discussion Papers 5431, C.E.P.R. Discussion Papers.
- Giuseppe Fiori & Giuseppe Nicoletti & Stefano Scarpetta & Fabio Schiantarelli, 2007.
"Employment Outcomes and the Interaction Between Product and Labor Market Deregulation: Are They Substitutes or Complements?,"
Boston College Working Papers in Economics
663, Boston College Department of Economics, revised 08 Aug 2008.
- Fiori, Giuseppe & Nicoletti, Giuseppe & Scarpetta, Stefano & Schiantarelli, Fabio, 2007. "Employment Outcomes and the Interaction Between Product and Labor Market Deregulation: Are They Substitutes or Complements?," IZA Discussion Papers 2770, Institute for the Study of Labor (IZA).
- Reinhart, Carmen & Ogaki, Masao, 1998.
"Intertemporal substitution and durable goods: long-run data,"
13683, University Library of Munich, Germany.
- Ogaki, Masao & Reinhart, Carmen M., 1998. "Intertemporal substitution and durable goods: long-run data," Economics Letters, Elsevier, vol. 61(1), pages 85-90, October.
- Morten O. Ravn & Stephanie Schmitt-Grohe & Martin Uribe, 2004.
"The Macroeconomics of Subsistence Points,"
NBER Working Papers
11012, National Bureau of Economic Research, Inc.
- Coenen, Günter & McAdam, Peter & Straub, Roland, 2008.
"Tax reform and labour-market performance in the euro area: A simulation-based analysis using the New Area-Wide Model,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 32(8), pages 2543-2583, August.
- Coenen, Günter & McAdam, Peter & Straub, Roland, 2007. "Tax reform and labour-market performance in the euro area: a simulation-based analysis using the New Area-Wide Model," Working Paper Series 0747, European Central Bank.
- John V. Duca & David D. VanHoose, 2000. "Has Greater Competition Restrained U.S. Inflation?," Southern Economic Journal, Southern Economic Association, vol. 66(3), pages 729=741, January.
- Dobbelaere, Sabien, 2004. "Estimation of price-cost margins and union bargaining power for Belgian manufacturing," International Journal of Industrial Organization, Elsevier, vol. 22(10), pages 1381-1398, December.
- Koedijk, C.G. & Kremers, J., 1996. "Market opening, regulation and growth in Europe," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3108676, Tilburg University.
- Spector, David, 2002.
"Competiton and the capital-labor conflict,"
CEPREMAP Working Papers (Couverture Orange)
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tai Tone Lim).
If references are entirely missing, you can add them using this form.