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On the reversibility of structural reforms


  • Campos, Nauro F.
  • Horváth, Roman


What are the factors that explain reversals in the implementation of structural reforms? Our main hypothesis is that reversals in different reforms are driven by different factors. This paper presents novel evidence showing that (a) FDI inflows reduce the likelihood of privatization reversals, (b) worsened terms of trade increase the probability of external liberalization reversals and (c) labor strikes propel reversals in price liberalization.

Suggested Citation

  • Campos, Nauro F. & Horváth, Roman, 2012. "On the reversibility of structural reforms," Economics Letters, Elsevier, vol. 117(1), pages 217-219.
  • Handle: RePEc:eee:ecolet:v:117:y:2012:i:1:p:217-219 DOI: 10.1016/j.econlet.2012.04.102

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    References listed on IDEAS

    1. Dewatripont, Mathias & Roland, Gerard, 1995. "The Design of Reform Packages under Uncertainty," American Economic Review, American Economic Association, vol. 85(5), pages 1207-1223, December.
    2. Campos, Nauro F & Horváth, Roman, 2006. "Reform Redux: Measurement, Determinants and Reversals," CEPR Discussion Papers 5673, C.E.P.R. Discussion Papers.
    3. Bruno Merlevede, 2003. "Reform reversals and output growth in transition economies," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(4), pages 649-669, December.
    4. Campos, Nauro F. & Horváth, Roman, 2012. "Reform redux: Measurement, determinants and growth implications," European Journal of Political Economy, Elsevier, vol. 28(2), pages 227-237.
    5. Mukherjee, Arijit & Suetrong, Kullapat, 2009. "Privatization, strategic foreign direct investment and host-country welfare," European Economic Review, Elsevier, vol. 53(7), pages 775-785, October.
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    Cited by:

    1. Agnello, Luca & Sousa, Ricardo M., 2015. "Can re-regulation of the financial sector strike back public debt?," Economic Modelling, Elsevier, vol. 51(C), pages 159-171.
    2. Agnello, Luca & Castro, Vitor & Jalles, João Tovar & Sousa, Ricardo M., 2015. "What determines the likelihood of structural reforms?," European Journal of Political Economy, Elsevier, vol. 37(C), pages 129-145.
    3. Campos, Nauro F & De Grauwe, Paul & Ji, Yuemei, 2017. "Structural Reforms, Growth and Inequality: An Overview of Theory, Measurement and Evidence," IZA Discussion Papers 11159, Institute for the Study of Labor (IZA).
    4. Nauro F. Campos & Paul De Grauwe & Yuemei Ji, 2017. "Structural Reforms, Growth and Inequality: An Overview of Theory, Measurement and Evidence," CESifo Working Paper Series 6812, CESifo Group Munich.
    5. Yaroslava Babych & Michael Fuenfzig, 2012. "An Application of the Growth Diagnostics Framework: The Case of Georgia," Working Papers 001-12, International School of Economics at TSU, Tbilisi, Republic of Georgia.

    More about this item


    Reform reversals; Price liberalization; Trade liberalization; Privatization; Political economy;

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements


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