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The Frailty of Economic Reforms: Political Logic and Constitutional Lessons

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Abstract

Why are efficiency-enhancing reforms often frail and subject to being undermined over time? Two theories are examined: public-choice theory, which explains this as the possible result of a need, from time to time, to wipe the slate clean in order to retain productivity in the distribution of favors to interest groups, and a theory which acknowledges that politicians may implement reforms for ideological reasons but still, as time passes, be influenced by the logic of the political and media systems to abandon their initial aspirations. In any case, the demise of reforms is partly a function of the constitutional setting: rules which encourage shortsightedness and easy satisfaction of interest-group agendas make it difficult for decision-makers to withstand pressure for legislative change. Avenues to mitigate these problems through constitutional reforms are explored.

Suggested Citation

  • Berggren, Niclas, 2003. "The Frailty of Economic Reforms: Political Logic and Constitutional Lessons," Ratio Working Papers 1, The Ratio Institute.
  • Handle: RePEc:hhs:ratioi:0001
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    More about this item

    Keywords

    tax reform; political incentives; constitutional reform;

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General

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