This paper discusses the design of structural policies by relating second-best results and the complementarity of reforms. It computes a complementarity index based on structural reform indicators compiled by the EBRD for transition countries, assuming that the run-up to EU integration corresponds to a nearly complete policy cycle. Using econometric panel estimates, the level of reforms and changes in their complementarity are found to be positively related to output growth, corrected for endogeneity, and given initial conditions and the extent of macroeconomic stabilisation.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
12544.
Length: Date of creation: Sep 2006 Date of revision: Handle: RePEc:nbr:nberwo:12544
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Find related papers by JEL classification: P2 - Economic Systems - - Socialist Systems and Transition Economies O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data
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