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On the Sequencing of Structural Reforms

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  • Sebastian Edwards

Abstract

Both OECD and developing economies have embarked on structural reforms aimed at dismantling regulations and reducing the extent of distortions affecting different sectors of their economies. Regardless of the marked difference, both groups have to deal with the problems of the appropriate sequencing and speed of reforms. This paper first critically reviews the LDCs' related literature on sequencing and speed of structural reforms drawing out features which are of relevance for OECD economies. The paper then develops a formal framework based on a welfare criterion for evaluating efficiency effects of structural policies paying particular attention to the way in which distortions interact both intra and inter-temporally. The framework is then used to discuss some of the important issues such as the sequencing of micro and macro reforms ("competition of instruments"), broad front versus sequential reforms, and the role of policy credibility.

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  • Sebastian Edwards, 1989. "On the Sequencing of Structural Reforms," NBER Working Papers 3138, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:3138
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    Cited by:

    1. Dollar, David & Svensson, Jakob, 2000. "What Explains the Success or Failure of Structural Adjustment Programmes?," Economic Journal, Royal Economic Society, vol. 110(466), pages 894-917, October.
    2. Alexandre Minda, 1997. "Marchés boursiers émergents et financement des infrastructures en Amérique Latine," Revue Économique, Programme National Persée, vol. 48(2), pages 295-320.
    3. Philip Arestis, 2003. "Financial Sector Reforms in Developing Countries with Special Reference to Egypt," Economics Working Paper Archive wp_383, Levy Economics Institute.
    4. Bhattacharya, Rina, 1999. "Capital flight under uncertainty about domestic taxation and trade liberalization," Journal of Development Economics, Elsevier, vol. 59(2), pages 365-387, August.
    5. Bicaba, Zorobabel, 2011. "Growth and financial reforms trajectory: an optimal matching sequence analysis approach," MPRA Paper 34057, University Library of Munich, Germany.
    6. repec:mes:jeciss:v:36:y:2002:i:3:p:581-600 is not listed on IDEAS
    7. Yilmaz Akyüz, 1994. "Libéralisation financière : mythes et réalités," Revue Tiers Monde, Programme National Persée, vol. 35(139), pages 521-555.
    8. Cardenas, Mauricio & Barrera, Felipe, 1997. "On the effectiveness of capital controls: The experience of Colombia during the 1990s," Journal of Development Economics, Elsevier, vol. 54(1), pages 27-57, October.
    9. Yue Ma, 2008. "Incomplete financial market and the sequence of international trade liberalization," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 13(1), pages 108-117.
    10. Battle, Ann Marie, 1997. "Welfare effects of liberalization reforms with distortions in financial and labor markets," Journal of Development Economics, Elsevier, vol. 52(2), pages 279-294, April.
    11. Abbott, Philip & Andersen, Thomas Barnebeck & Tarp, Finn, 2010. "IMF and economic reform in developing countries," The Quarterly Review of Economics and Finance, Elsevier, vol. 50(1), pages 17-26, February.
    12. Corbo, Vittorio & Fischer, Stanley, 1991. "Adjustment programs and Bank support : rationale and main results," Policy Research Working Paper Series 582, The World Bank.
    13. Geneviève Marchini, 1996. "Ouverture financière, stabilisation et transformation productive au Mexique, 1988-1994," Revue Tiers Monde, Programme National Persée, vol. 37(146), pages 385-405.
    14. Corbo, Vittorio & Fischer, Stanley, 1995. "Structural adjustment, stabilization and policy reform: Domestic and international finance," Handbook of Development Economics,in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 44, pages 2845-2924 Elsevier.
    15. Bhattacharya, Rina, 1997. "Pace, sequencing and credibility of structural reforms," World Development, Elsevier, vol. 25(7), pages 1045-1061, July.
    16. Newell, Andrew & Reilly, Barry, 1997. "Rates of Return to Educational Qualifications in the Transitional Economies," Discussion Papers in Economics 03/97, Department of Economics, University of Sussex.
    17. Conley, John P. & Maloney, William F., 1995. "Optimal sequencing of credible reforms with uncertain outcomes," Journal of Development Economics, Elsevier, vol. 48(1), pages 151-166, October.
    18. Sebastián Claro, 2005. "Understanding International Differences in Trade and Capital Market Integration," Documentos de Trabajo 285, Instituto de Economia. Pontificia Universidad Católica de Chile..
    19. Siebert, Horst, 1990. "Die Wahlmöglichkeiten einer deutsch-deutschen Geld- und Währungspolitik," Open Access Publications from Kiel Institute for the World Economy 1998, Kiel Institute for the World Economy (IfW).
    20. Schweickert, Rainer, 1994. "Regional integration: A worthwhile strategy for catching up?," Kiel Working Papers 623, Kiel Institute for the World Economy (IfW).
    21. Siebert, Horst, 1991. "The transformation of Eastern Europe," Kiel Discussion Papers 163, Kiel Institute for the World Economy (IfW).
    22. Schweickert, Rainer, 1994. "Macroeconomic reforms in the Southern cone: lessons for developing and newly emerging market economies," Kiel Working Papers 614, Kiel Institute for the World Economy (IfW).
    23. repec:tek:journl:v:5:y:2016:i:1:p:25-69 is not listed on IDEAS
    24. Siebert, Horst & Schmieding, Holger & Nunnenkamp, Peter, 1991. "The transformation of a socialist economy: lessons of German unification," Kiel Working Papers 469, Kiel Institute for the World Economy (IfW).
    25. Laurila, Juhani & Singh, Rupinder, 2000. "Sequential reform strategy : The case of Azerbaijan," BOFIT Discussion Papers 8/2000, Bank of Finland, Institute for Economies in Transition.

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