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Democracy and Reforms

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  • Antonio Spilimbergo
  • Paola Giuliano
  • Prachi Mishra

Abstract

Empirical evidence on the relationship between democracy and economic reforms is limited to few reforms, countries, and years. This paper studies the impact of democracy on the adoption of economic reforms using a new dataset on reforms in the financial, capital and banking sectors, product markets, agriculture, and trade for 150 countries over the period 1960 - 2004. Democracy has a positive and significant impact on the adoption of economic reforms but there is no evidence that economic reforms foster democracy. Our results are robust to the inclusion of a large variety of controls and estimation strategies.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 10/173.

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Length: 39
Date of creation: 01 Jul 2010
Date of revision:
Handle: RePEc:imf:imfwpa:10/173

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Keywords: Agricultural policy; Capital account liberalization; Trade policy; Financial sector; Economic reforms; correlation; statistical significance; neighboring countries; trade reforms; statistics; factor analysis; tariff rates; instrumental variables; economic liberalization; political economy; trade shocks; international trade; interest groups; equation; terms of trade; standard errors; correlations; national legislation; probability; terms of trade shocks; trade sector; trade liberalization; trading partners; domestic reforms; functional form; sample selection; predictions; instrumental variable; transition countries; market liberalization; sample size; trade flows; bilateral trade flows; dummy variable; domestic economy; average tariffs; measure of trade; standard error; samples; survey; bilateral trade; tariff liberalization; average tariff; export marketing; econometrics; competition policy; per capita income; price liberalization; mathematical programming; weighted tariff; terms-of-trade shocks; average tariff rates; free trade; standard deviation; trade restriction;

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References

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  1. Milner, Helen V. & Kubota, Keiko, 2005. "Why the Move to Free Trade? Democracy and Trade Policy in the Developing Countries," International Organization, Cambridge University Press, vol. 59(01), pages 107-143, January.
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  20. repec:cup:cbooks:9780521855266 is not listed on IDEAS
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  27. 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.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Demokrati och ekonomiska reformer
    by Niclas Berggren in Nonicoclolasos on 2010-10-13 03:26:15
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Cited by:
  1. Kym Anderson & Gordon Rausser & Johan Swinnen, 2013. "Political Economy of Public Policies: Insights from Distortions to Agricultural and Food Markets," Journal of Economic Literature, American Economic Association, vol. 51(2), pages 423-77, June.
  2. Hauner, David & Prati, Alessandro & Bircan, Cagatay, 2013. "The interest group theory of financial development: Evidence from regulation," Journal of Banking & Finance, Elsevier, vol. 37(3), pages 895-906.
  3. Abdul Abiad & Petya Koeva Brooks & Irina Tytell & Daniel Leigh & Ravi Balakrishnan, 2009. "What’S the Damage? Medium-Term Output Dynamics After Banking Crises," IMF Working Papers 09/245, International Monetary Fund.
  4. Alessandro Olper & Valentina Raimondi, 2012. "Electoral Rules, Forms of Government and Redistributive Policy: Evidence from Agriculture and Food Policies," LICOS Discussion Papers 30512, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  5. Jan Fałkowski & Alessandro Olper, 2012. "Political Competition and Policy Choices: The Evidence From Agricultural Protection," Working Papers 2012-18, Faculty of Economic Sciences, University of Warsaw.

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