Advanced Search
MyIDEAS: Login to save this paper or follow this series

Uncertainty, Informational Spillovers and Policy Reform: A Gravity Model Approach

Contents:

Author Info

  • Jan Fidrmuc

    ()

  • Elira Karaja

    ()

Abstract

Reforms often occur in waves, seemingly cascading from country to country. We argue that such reform waves can be driven by informational spillovers: uncertainty about the outcome of reform is reduced by learning from the experience of similar countries. We motivate this hypothesis with a simple theoretical model of informational spillovers and learning, and then test it empirically using an approach inspired by the gravity model. We find evidence of informational spillovers both with respect to both political and economic liberalization. While the previous literature has focused only on economic reform, we find that the spillovers are particularly important for political changes.

Download Info

If 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.
File URL: http://www.brunel.ac.uk/__data/assets/pdf_file/0009/342783/CEDI_13-04.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Centre for Economic Development and Institutions(CEDI), Brunel University in its series CEDI Discussion Paper Series with number 13-04.

as in new window
Length: 22 pages
Date of creation: Jun 2013
Date of revision:
Handle: RePEc:edb:cedidp:13-04

Contact details of provider:
Postal: CEDI, Brunel University,West London,UB8 3PH,United Kingdom
Phone: +44 (0)1895 266649
Fax: +44 (0)1895 266649
Web page: http://www.cedi.org.uk
More information through EDIRC

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. 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.
  2. Dewatripont, M & Roland, G, 1992. "The Virtues of Gradualism and Legitimacy in the Transition to a Market Economy," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 102(411), pages 291-300, March.
  3. Martin Bodenstein & Heinrich Ursprung, 2005. "Political yardstick competition, economic integration, and constitutional choice in a federation:," Public Choice, Springer, Springer, vol. 124(3), pages 329-352, September.
  4. Harry Kelejian & Peter Murrell & Oleksandr Shepotylo, 2007. "Spatial Spillovers in the Development of Institutions," Electronic Working Papers, University of Maryland, Department of Economics 07-001, University of Maryland, Department of Economics.
  5. Brezis, Elise S. & Verdier, Thierry, 2003. "Political institutions and economic reforms in Central and Eastern Europe: a snowball effect," Economic Systems, Elsevier, vol. 27(3), pages 289-311, September.
  6. Richard Baldwin & Daria Taglioni, 2006. "Gravity for Dummies and Dummies for Gravity Equations," NBER Working Papers 12516, National Bureau of Economic Research, Inc.
  7. Baliamoune-Lutz, Mina, 2009. "Entrepreneurship and Reforms in Developing Countries," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  8. Alberto Alesina & Allan Drazen, 1989. "Why are Stabilizations Delayed?," NBER Working Papers 3053, National Bureau of Economic Research, Inc.
  9. Dewatripont, Mathias & Roland, Gérard, 1993. "The Design of Reform Packages Under Uncertainty," CEPR Discussion Papers 860, C.E.P.R. Discussion Papers.
  10. Cukierman, A., 1997. "When Does it Take A Nixon To Go To China?," Discussion Paper, Tilburg University, Center for Economic Research 1997-91, Tilburg University, Center for Economic Research.
  11. Wrede, Matthias, 2001. "Yardstick competition to tame the Leviathan," European Journal of Political Economy, Elsevier, vol. 17(4), pages 705-721, November.
  12. Durlauf,S.N., 2003. "Neighborhood effects," Working papers, Wisconsin Madison - Social Systems 17, Wisconsin Madison - Social Systems.
  13. Nauro F. Campos & Roman Horváth, 2006. "Reform Redux: Measurement, Determinants and Reversals," Working Papers IES, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies 2006/16, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Apr 2006.
  14. SALMON, Pierre, 1987. "Decentralization as an incentive scheme," Institut des Mathématiques Economiques – Document de travail de l’I.M.E. (1974-1993) 98, Institut des Mathématiques Economiques. LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS, Université de Bourgogne.
  15. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, Econometric Society, vol. 49(6), pages 1417-26, November.
  16. Jan K. Brueckner, 1999. "Welfare Reform and the Race to the Bottom: Theory and Evidence," Southern Economic Journal, Southern Economic Association, vol. 66(2), pages 505-525, January.
  17. Oliveira Martins, Joaquim & De Macedo, Jorge Braga, 2008. "Growth, Reform Indicators and Policy Complementarities," Economics Papers from University Paris Dauphine 123456789/7960, Paris Dauphine University.
  18. Martin Gassebner & Noel Gaston & Michael Lamla, 2008. "The Inverse Domino Effect: Are Economic Reforms Contagious?," KOF Working papers 08-187, KOF Swiss Economic Institute, ETH Zurich.
  19. Ashworth, John & Heyndels, Bruno, 1997. "Politicians' preferences on local tax rates: An empirical analysis," European Journal of Political Economy, Elsevier, vol. 13(3), pages 479-502, September.
  20. Faber, Gerrit & Gerritse, Michiel, 2012. "Foreign determinants of local institutions: Spatial dependence and openness," European Journal of Political Economy, Elsevier, vol. 28(1), pages 54-63.
  21. Bartz, Kevin & Fuchs-Schündeln, Nicola, 2012. "The role of borders, languages, and currencies as obstacles to labor market integration," European Economic Review, Elsevier, vol. 56(6), pages 1148-1163.
  22. Meseguer, Covadonga, 2006. "Learning and economic policy choices," European Journal of Political Economy, Elsevier, vol. 22(1), pages 156-178, March.
  23. Dewatripont, M & Roland, G, 1992. "Economic Reform and Dynamic Political Constraints," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 59(4), pages 703-30, October.
  24. Becker, Sascha O. & Egger, Peter H. & Seidel, Tobias, 2009. "Common political culture: Evidence on regional corruption contagion," European Journal of Political Economy, Elsevier, vol. 25(3), pages 300-310, September.
  25. Andrei Shleifer, 1985. "A Theory of Yardstick Competition," RAND Journal of Economics, The RAND Corporation, vol. 16(3), pages 319-327, Autumn.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:edb:cedidp:13-04. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sarmistha Pal) The email address of this maintainer does not seem to be valid anymore. Please ask Sarmistha Pal to update the entry or send us the correct address.

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.