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On the Reversibility of Structural Reforms

Author

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  • Campos, Nauro F.

    (University College London)

  • Horváth, Roman

    (Charles University, Prague)

Abstract

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 uses new reform indicators and 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) labour strikes propel reversals in the liberalization of wages and prices.

Suggested Citation

  • Campos, Nauro F. & Horváth, Roman, 2012. "On the Reversibility of Structural Reforms," IZA Discussion Papers 6522, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp6522
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    File URL: https://docs.iza.org/dp6522.pdf
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    References listed on IDEAS

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    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," IZA Discussion Papers 2093, Institute of Labor Economics (IZA).
    3. 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.
    4. 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.
    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.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Stuart Shields, 2020. "The EBRD, fail forward neoliberalism and the construction of the European periphery," The Economic and Labour Relations Review, , vol. 31(2), pages 230-248, June.
    2. 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.
    3. 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.
    4. 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.
    5. Elitsa R Banalieva & Alvaro Cuervo-Cazurra & Ravi Sarathy, 2018. "Dynamics of pro-market institutions and firm performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(7), pages 858-880, September.
    6. 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.
    7. Salih BARIŞIK & Kubilay ERGEN, 2023. "Heterogenous Effects of the Determinants of Pro-market Reforms: Panel Quantile Estimation for OECD Countries," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 36-51, June.
    8. Jones, Chris & Temouri, Yama & Kirollos, Karim & Du, Jun, 2023. "Tax havens and emerging market multinationals: The role of property rights protection and economic freedom," Journal of Business Research, Elsevier, vol. 155(PB).

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    More about this item

    Keywords

    reform reversals; price liberalization; trade liberalization; privatization; political economy;
    All these keywords.

    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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