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No Pain, No Gain: Market Reform, Unemployment, and Politics in Bulgaria

In 1997, a new center-right government came to power in Bulgaria with a mandate to accelerate market reforms. By the time of the next elections in 2001, 75 percent of GDP was produced in the private sector, compared to 45 percent in 1996. The government however lost the elections. This paper uses unique survey data to examine whether the high unemployment associated with market reform contributed to the election outcome. The results suggest that high unemployment does not explain the election loss. In fact, many of the unemployed believed that high unemployment was the necessary price for future prosperity.

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File URL: http://icepp.gsu.edu/files/2015/03/ispwp0310.pdf
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Paper provided by International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University in its series International Center for Public Policy Working Paper Series, at AYSPS, GSU with number paper0310.

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Length: 29 pages
Date of creation: 01 May 2003
Date of revision:
Handle: RePEc:ays:ispwps:paper0310
Contact details of provider: Phone: 404-413-0235
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Web page: http://aysps.gsu.edu/isp/index.html

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  1. Fidrmuc, J., 1998. "Political Support for Reforms : Economics of Voting in Transition Countries," Discussion Paper 1998-98, Tilburg University, Center for Economic Research.
  2. Hayo, Bernd, 2004. "Public support for creating a market economy in Eastern Europe," Journal of Comparative Economics, Elsevier, vol. 32(4), pages 720-744, December.
  3. Gérard Roland, 2004. "Transition and Economics: Politics, Markets, and Firms," MIT Press Books, The MIT Press, edition 1, volume 1, number 026268148x, June.
  4. Doyle, Orla & Fidrmuc, Jan, 2003. "Anatomy of Voting Behaviour and Attitudes During Post-Communist Transition Czech Republic 1990-98," CEPR Discussion Papers 3801, C.E.P.R. Discussion Papers.
  5. Rodrik, Dani, 1995. "The Dynamics of Political Support for Reform in Economies in Transition," CEPR Discussion Papers 1115, C.E.P.R. Discussion Papers.
  6. Mathias Dewatripont & Gérard Roland, 1992. "The virtues of gradualism and legitimacy in the transition to a market economy," ULB Institutional Repository 2013/9587, ULB -- Universite Libre de Bruxelles.
  7. Carlson, John A. & Valev, Neven T., 2001. "Credibility of a new monetary regime: The currency board in Bulgaria," Journal of Monetary Economics, Elsevier, vol. 47(3), pages 581-594, June.
  8. Aslund,Anders, 2002. "Building Capitalism," Cambridge Books, Cambridge University Press, number 9780521801393.
  9. Tito Boeri & Katherine Terrell, 2001. "Institutional Determinants of Labor Reallocation in Transition," William Davidson Institute Working Papers Series 384, William Davidson Institute at the University of Michigan.
  10. John Ham & Jan Svejnar & Katherine Terrell, 1998. "Unemployment and the Social Safety Net During Transitions to a Market Economy: Evidence from the Czech and Slovak Republic," William Davidson Institute Working Papers Series 169, William Davidson Institute at the University of Michigan.
  11. World Bank, 2001. "Bulgaria : The Dual Challenge of Transition and Accession," World Bank Publications, The World Bank, number 13958.
  12. Schwartz, Anna J., 1993. "Currency boards: their past, present, and possible future role," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 147-187, December.
  13. Warner, Andrew M., 2001. "Is Economic Reform Popular at the Polls? Russia 1995," Journal of Comparative Economics, Elsevier, vol. 29(3), pages 448-465, September.
  14. G�rard Roland, 2002. "The Political Economy of Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 29-50, Winter.
  15. Polackova Brixi, Hana & Shatalov, Sergei & Zlaoui, Leila, 2000. "Managing fiscal risk in Bulgaria," Policy Research Working Paper Series 2282, The World Bank.
  16. Nannestad, Peter & Paldam, Martin, 1994. " The VP-Function: A Survey of the Literature on Vote and Popularity Functions after 25 Years," Public Choice, Springer, vol. 79(3-4), pages 213-45, June.
  17. 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.
  18. Dobrinsky, Rumen, 2000. "The Transition Crisis in Bulgaria," Cambridge Journal of Economics, Oxford University Press, vol. 24(5), pages 581-602, September.
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