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Sequencing of Economic Reforms in the Presence of Political Constraints

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  • Cesar Martinelli

    (UCLA)

  • Mariano Tommasi

    (UCLA)

Abstract

This paper presents a model portraying a country in a political deadlock about economic reform proposals in which certain measures hurt strongly‐organized interests. We show that when governments are unable to precommit and interest groups have veto power, only far‐reaching reforms (even if quite costly) have hope of success. The model intends to explain why in recent years several Latin American countries have opted for radical reform.
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Suggested Citation

  • Cesar Martinelli & Mariano Tommasi, 1993. "Sequencing of Economic Reforms in the Presence of Political Constraints," UCLA Economics Working Papers 701, UCLA Department of Economics.
    • Handle: RePEc:cla:uclawp:701
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    References listed on IDEAS

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    Cited by:

    1. John S. Earle & Scott Gehlbach, 2003. "A Spoonful of Sugar: Privatization and Popular Support for Reform in the Czech Republic," Economics and Politics, Wiley Blackwell, vol. 15(1), pages 1-32, March.
    2. Filippo Belloc & Antonio Nicita, 2011. "Liberalization-Privatization Paths: Policies and Politics," Department of Economics University of Siena 609, Department of Economics, University of Siena.
    3. Nauro F. Campos & Roman Horváth, 2006. "Reform Redux: Measurement, Determinants and Reversals," Working Papers IES 2006/16, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Apr 2006.
    4. Clemens Buchen, 2023. "Institutional reform paths," Economics and Politics, Wiley Blackwell, vol. 35(3), pages 1099-1121, November.
    5. Micael Castanheira & Gaëtan Nicodème & Paola Profeta, 2012. "On the political economics of tax reforms: survey and empirical assessment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(4), pages 598-624, August.
    6. Lora, Eduardo, 1998. "What Makes Reforms Likely? Timing and Sequencing of Structural Reforms in Latin America," Working Papers 244240, Inter-American Development Bank.
    7. Birdsall, Nancy & de la Torre, Augusto & Caicedo, Felipe Valencia, 2010. "The Washington consensus : assessing a damaged brand," Policy Research Working Paper Series 5316, The World Bank.
    8. Asturias, Jose & Hur, Sewon & Kehoe, Timothy J. & Ruhl, Kim J., 2016. "The interaction and sequencing of policy reforms," Journal of Economic Dynamics and Control, Elsevier, vol. 72(C), pages 45-66.
    9. Sebastian Edwards & Daniel Lederman, 1998. "The Political Economy of Unilateral Trade Liberalization: The Case of Chile," NBER Working Papers 6510, National Bureau of Economic Research, Inc.
    10. M. Chatib Basri, 2019. "Comment on “India's Economic Reforms: Achievements and Next Steps”," Asian Economic Policy Review, Japan Center for Economic Research, vol. 14(1), pages 65-66, January.
    11. Eduardo Lora & Mauricio Olivera, 2004. "What makes reforms likely: Political economy determinants of reforms in Latin America," Journal of Applied Economics, Universidad del CEMA, vol. 7, pages 99-135, May.
    12. Micael Castanheira & Gaëtan Nicodème & Paola Profeta, 2012. "On the political economics of tax reforms: survey and empirical assessment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(4), pages 598-624, August.
    13. Alwyn Young, 2000. "The Razor's Edge: Distortions and Incremental Reform in the People's Republic of China," NBER Working Papers 7828, National Bureau of Economic Research, Inc.
    14. Cukierman, Alex & Tommasi, Mariano, 1998. "When Does It Take a Nixon to Go to China?," American Economic Review, American Economic Association, vol. 88(1), pages 180-197, March.
    15. Mr. S. Nuri Erbas, 2002. "Primeron Reforms in a Second-Best Ambiguous Environment: A Case for Gradualism," IMF Working Papers 2002/050, International Monetary Fund.
    16. Douglas Marcouiller, 1995. "Putting in politics: A review of economic models with endogenous determination of policy," Forum for Social Economics, Springer;The Association for Social Economics, vol. 25(1), pages 37-51, September.
    17. Jain, Sanjay & Sharun Mukand, 2003. "Public Opinion and the Dynamics of Reform," Royal Economic Society Annual Conference 2003 114, Royal Economic Society.
    18. Hans Pitlik, 2004. "Institutionelle Voraussetzungen marktorientierter Reformen der Wirtschaftspolitik," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 240/2004, Department of Economics, University of Hohenheim, Germany.
    19. Malika AHMED ZAID-CHERTOUK & Philippe BANCE, 2015. "Gouvernances Publiques Et Entreprises Publiques Dans Les Economies De Rente," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 86(4), pages 657-681, December.
    20. Perotti, Roberto, 1998. " The Political Economy of Fiscal Consolidations," Scandinavian Journal of Economics, Wiley Blackwell, vol. 100(1), pages 367-394, March.
    21. Eduardo Lora, 2000. "¿Que propicia las reformas? La oportunidad y el secuenciamiento de las reformas estructurales en América Latina," Research Department Publications 4218, Inter-American Development Bank, Research Department.
    22. Gerard Rpland, 2001. "The Political Economy of Transition," William Davidson Institute Working Papers Series 413, William Davidson Institute at the University of Michigan.
    23. Sutter, Daniel, 1999. "Discretionary policy implementation and reform," Journal of Economic Behavior & Organization, Elsevier, vol. 39(3), pages 249-262, July.

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