After the Honeymoon: On the Economics and the Politics of Economic Transformation
Abstract
This paper focuses on the obvious: Pareto-improving programmes may fail to improve everyone's lot. Politically, it has often been interpreted as a requirement that a majority should benefit from the change. Events in Central and Eastern Europe suggest otherwise and cast doubt on the relevance of the median-voter theorem. The addition of minority discontents may result in major political difficulties that lead governments to avoid actions that generate strong minority objections. As a result, the technically best-crafted plans may be rejected for political reasons. In addition, reform programmes which are ex ante politically acceptable may well become rejected ex post after they are implemented. One solution is to introduce a heavy dose of egalitarian income distribution, even if it runs against labour supply incentives.Download Info
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Bibliographic Info
Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 734.Length:
Date of creation: Nov 1992
Date of revision:
Handle: RePEc:cpr:ceprdp:734
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Related research
Keywords: Economic Reform; Political Equilibrium;Other versions of this item:
- Wyplosz, Charles, 1993. "After the honeymoon: On the economics and the politics of economic transformation," European Economic Review, Elsevier, vol. 37(2-3), pages 379-386, April.
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
- E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Cecilia Testa, 2001.
"Reform, Lobbies and Welfare: A Common Agency Approach,"
Royal Holloway, University of London: Discussion Papers in Economics
01/6, Department of Economics, Royal Holloway University of London, revised Dec 2001.
- Cecilia Testa, 2005. "Reforms, lobbies and welfare: A common agency approach," Public Choice, Springer, vol. 125(3), pages 305-337, December.
- Byung-Yeon Kim & Jukka Pirttilä, 2003.
"The political economy of reforms: Empirical evidence from post- communist transition in the 1990s,"
Macroeconomics
0304009, EconWPA.
- Kim, Byung-Yeon & Pirttilä, Jukka, 2003. "The political economy of reforms: Empirical evidence from post-communist transition in the 1990s," BOFIT Discussion Papers 4/2003, Bank of Finland, Institute for Economies in Transition.
- Kim, Byung-Yeon & Jukka Pirttila, 2003. "The Political Economy of Reforms: Empirical Evidence from Post-Communist Transition in the 1990s," Royal Economic Society Annual Conference 2003 120, Royal Economic Society.
- Begovic, Boris & Paunovic, Marko, 2011. "Political support for enterprise restructuring and voting in Serbia," European Journal of Political Economy, Elsevier, vol. 27(1), pages 171-180, March.
- Jan Winiecki, 2000. "Solving Foreign Trade Puzzles in Post-Communist Transition," Post-Communist Economies, Taylor and Francis Journals, vol. 12(3), pages 261-278.
- Stanislaw Gomulka, 1995. "The IMF-Supported Programs of Poland and Russia, 1990-1994: Principles, Errors and Results," CASE Network Studies and Analyses 0036, CASE-Center for Social and Economic Research.
- Kim, Byung-Yeon & Pirttila, Jukka, 2006. "Political constraints and economic reform: Empirical evidence from the post-communist transition in the 1990s," Journal of Comparative Economics, Elsevier, vol. 34(3), pages 446-466, September.
- Funke, Norbert, 1993. "Timing and sequencing of reforms: Competing views," Kiel Working Papers 552, Kiel Institute for the World Economy.
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