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The Political Economy of Reforms: Empirical Evidence from Post-Communist Transition in the 1990s

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Author Info
Kim, Byung-Yeon (University of Essex)
Jukka Pirttila

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Abstract

Using a novel data set from post-communist countries in the 1990s, this paper examines the link-ages between political constraints, economic reforms and growth. Results from a dynamic panel analysis suggest that public support for reform is negatively associated with increases in income inequality and unemployment. In addition, both ex post and ex ante political constraints referring to the extent of public support affect progress in economic reforms, which in turn determines eco-nomic growth. These findings highlight that while economic reforms are needed to foster growth, they must be designed in such a way that they do not undermine political support for reform.

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Publisher Info
Paper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2003 with number 120.

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Date of creation: 04 Jun 2003
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Handle: RePEc:ecj:ac2003:120

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Web page: http://www.res.org.uk/society/annualconf.asp
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Related research
Keywords: political constraints; economic reform; transition; growth; dynamic panel models;

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Find related papers by JEL classification:
P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data

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  5. Oli Havrylyshyn & Ron van Rooden, 2000. "Institutions Matter in Transition, but so do Policies," IMF Working Papers 00/70, International Monetary Fund.
  6. Krueger, Gary & Ciolko, Marek, 1998. "A Note on Initial Conditions and Liberalization during Transition," Journal of Comparative Economics, Elsevier, vol. 26(4), pages 718-734, December. [Downloadable!] (restricted)
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    Other versions:
  8. Fernandez, Raquel & Rodrik, Dani, 1991. "Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty," American Economic Review, American Economic Association, vol. 81(5), pages 1146-55, December. [Downloadable!] (restricted)
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  11. Dani Rodrik, 1996. "Understanding Economic Policy Reform," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 9-41, March. [Downloadable!] (restricted)
  12. Dani Rodrik, 1992. "The Rush to Free Trade in the Developing World: Why So Late? Why Now? Will it Last?," NBER Working Papers 3947, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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    Other versions:
  15. de Melo, Martha & Denizer, Cevdet & Gelb, Alan, 1996. "From plan to market : patterns of transition," Policy Research Working Paper Series 1564, The World Bank. [Downloadable!]
  16. Dewatripont, Mathias & Roland, Gerard, 1995. "The Design of Reform Packages under Uncertainty," American Economic Review, American Economic Association, vol. 85(5), pages 1207-23, December. [Downloadable!] (restricted)
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  17. Aghion, P. & Blanchard, O.J., 1993. "On the Speed of Transition in Central Europe," Working papers 93-8, Massachusetts Institute of Technology (MIT), Department of Economics.
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  18. 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. [Downloadable!] (restricted)
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  19. Philippe Aghion & Olivier Jean Blanchard, 1994. "On the Speed of Transition Central Europe," NBER Working Papers 4736, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  20. Eduardo Borensztein & Ratna Sahay & Jeromin Zettelmeyer & Andrew Berg, 1999. "The Evolution of Output in Transition Economies - Explaining the Differences," IMF Working Papers 99/73, International Monetary Fund.
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