Political Sustainability of Economic reforms: Dynamics and Analysis of Regional Economic Factors
AbstractThis paper analyzes the political economy of the reform process theoretically and empirically.Building on the framework developed by Rodrik , a two-sector model of a transition economy is constructed.This model is then used to study the dynamics of political support for the reforms.The key role is played by the pattern of flows between the state and private sectors and unemployment.It is shown that while the workers in the private sector always support rapid reforms, the workers in the state sector and the unemployed will support rapid reforms only at the outset of the transition.Later, state-sector workers and unemployed will vote for a reduction in the speed of reforms.The relationship between unemployment and support for the reforms is then tested empirically using regional data from the Czech Republic, Hungary, Poland and Slovakia.
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Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 1996-74.
Date of creation: 1996
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economic reform; regional economics; Central Europe; Eastern Europe;
Find related papers by JEL classification:
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
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- Desai, Raj M. & Olofsgard, Anders, 2006. "The political advantage of soft budget constraints," European Journal of Political Economy, Elsevier, vol. 22(2), pages 370-387, June.
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