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Public Opinion and the Dynamics of Reform

  • Jain, Sanjay

    (University of Virginia)

  • Sharun Mukand

Why do economic reforms that are proceeding successfully often run aground? A number of observers have expressed surprise that public opinion regarding the continuation of a reform process often runs directly counter to the performance of the reform itself. This is especially surprising if one thinks of voters as forward-looking. If anything, a reform that is proceeding successfully might be expected to see burgeoning political support, as voters learn something about the underlying reform, or about the incumbent government's ability to implement it smoothly. In this paper we show that there might arise circumstances where the initial success of reform might result in it running into a political impasse. We suggest that the key might lie in the effect that the reform process has on the balance of political power. In particular, if initially successful reforms change the balance of political power in such a way as to make future redistribution less likely, then public opinion may turn against reform. Thus, in some sense, an initially successful reform may well end up sowing the seeds of its own destruction.

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Paper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2003 with number 114.

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Date of creation: 04 Jun 2003
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Handle: RePEc:ecj:ac2003:114
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  1. Sanjay Jain & Sharun W. Mukand, 2003. "Redistributive Promises and the Adoption of Economic Reform," American Economic Review, American Economic Association, vol. 93(1), pages 256-264, March.
  2. Bernd Hayo, 2001. "On Democratization and Economic Conditions in Eastern Europe," Development and Comp Systems 0106001, EconWPA.
  3. Werner, Alejandro M., 1999. "Building consensus for stabilizations," Journal of Development Economics, Elsevier, vol. 59(2), pages 319-336, August.
  4. Mariano Tommasi & Andres Velasco, 1995. "Where Are We in the Political Economy of Reform?," Working Papers 11, Universidad de San Andres, Departamento de Economia, revised Apr 1996.
  5. Shang-Jin Wei, 1997. "Gradualism versus Big Bang: Speed and Sustainability of Reforms," Canadian Journal of Economics, Canadian Economics Association, vol. 30(4), pages 1234-47, November.
  6. Tim Besley & Stephen Coate, . "An Economic Model of Representative Democracy," Penn CARESS Working Papers ecf70d639d700dba5327ab0c8, Penn Economics Department.
  7. Dani Rodrik, 1996. "Understanding Economic Policy Reform," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 9-41, March.
  8. Dewatripont, Mathias & Roland, Gérard, 1991. "The Virtues of Gradualism and Legitimacy in the Transition to a Market Economy," CEPR Discussion Papers 538, C.E.P.R. Discussion Papers.
  9. Dewatripont, Mathias & Roland, Gérard, 1993. "The Design of Reform Packages Under Uncertainty," CEPR Discussion Papers 860, C.E.P.R. Discussion Papers.
  10. Cesar Martinelli & Mariano Tommasi, 1993. "Sequencing of Economic Reforms in the Presence of Political Constraints," UCLA Economics Working Papers 701, UCLA Department of Economics.
  11. Acemoglu, Daron & Robinson, James A, 1999. "Inefficient Redistribution," CEPR Discussion Papers 2122, C.E.P.R. Discussion Papers.
  12. Daron Acemoglu & James A. Robinson, 2002. "Economic Backwardness in Political Perspective," NBER Working Papers 8831, National Bureau of Economic Research, Inc.
  13. 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.
  14. Besley, Timothy & Coate, Stephen, 1998. "Sources of Inefficiency in a Representative Democracy: A Dynamic Analysis," American Economic Review, American Economic Association, vol. 88(1), pages 139-56, March.
  15. Martin J. Osborne & Al Slivinksi, 1995. "A Model of Political Competition with Citizen-Candidates," Department of Economics Working Papers 1995-01, McMaster University.
  16. Fidrmuc, Jan, 2000. "Political support for reforms: Economics of voting in transition countries," European Economic Review, Elsevier, vol. 44(8), pages 1491-1513, August.
  17. 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.
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