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Reform Chatter and Democracy

Author

Listed:
  • Arezki,Rabah
  • Djankov,Simeon
  • Nguyen,Ha Minh
  • Yotzov,Ivan Victorov

Abstract

This paper explores the dynamics of media chatter about economic reforms using text analysis from about a billion newspaper articles in 28 languages. The paper shows that the intensity of reform chatter increases during economic downturns. This increase is more significant in democracies. Using instrumental variable techniques, the analysis finds the relationship to be causal. The paper also documents that reform chatter is followed by actual reforms, suggesting that democracies benefit from a "self-correcting" mechanism stemming from changing popular attitudes toward reform.

Suggested Citation

  • Arezki,Rabah & Djankov,Simeon & Nguyen,Ha Minh & Yotzov,Ivan Victorov, 2020. "Reform Chatter and Democracy," Policy Research Working Paper Series 9319, The World Bank.
    • Handle: RePEc:wbk:wbrwps:9319
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    References listed on IDEAS

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    1. Rabah Arezki & Markus Brückner, 2012. "Commodity Windfalls, Democracy and External Debt," Economic Journal, Royal Economic Society, vol. 122(561), pages 848-866, June.
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    6. Mr. Jonathan David Ostry & Mr. Alessandro Prati & Mr. Antonio Spilimbergo, 2009. "Structural Reforms and Economic Performance in Advanced and Developing Countries," IMF Occasional Papers 2009/003, International Monetary Fund.
    7. Cragg, John G. & Donald, Stephen G., 1993. "Testing Identifiability and Specification in Instrumental Variable Models," Econometric Theory, Cambridge University Press, vol. 9(2), pages 222-240, April.
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    12. Paul C. Tetlock, 2007. "Giving Content to Investor Sentiment: The Role of Media in the Stock Market," Journal of Finance, American Finance Association, vol. 62(3), pages 1139-1168, June.
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    Cited by:

    1. Arezki, Rabah & Simeon Djankov, Simeon & Nguyen, Ha & Yotzov, Ivan, 2021. "Reversal of Fortune for Political Incumbents : Evidence from Oil Shocks," The Warwick Economics Research Paper Series (TWERPS) 1362, University of Warwick, Department of Economics.

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    More about this item

    Keywords

    International Trade and Trade Rules; Trade and Multilateral Issues; Macroeconomic Management; Commodity Risk Management; Government Policies; Quality of Life&Leisure; Social Analysis; Youth and Governance; National Governance;
    All these keywords.

    JEL classification:

    • P10 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - General
    • P40 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - General
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)

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