Which Reforms Work and under What Institutional Environment? Evidence from a New Data Set on Structural Reforms

Massimiliano Gaetano Onorato, Alessandro Prati, Chris Papageorgiou

Risultato della ricerca: Contributo in rivistaArticolo in rivista

24 Citazioni (Scopus)

Abstract

Are structural reforms growth enhancing? Is the effectiveness of reforms constrained by a country's distance from the technology frontier or by its institutional environment? This paper takes a new and comprehensive look at these questions by employing a novel data set that includes several kinds of real (trade, agriculture, and networks) and financial (domestic finance, banking, securities, and capital account) reforms for an extensive list of developed and developing countries, going back to the early 1970s. First-pass evidence based on growth breaks analysis and on panel growth regressions suggests that on average, both real and financial sector reforms are positively associated with higher growth. However, on several occasions, botched reforms resulted in growth disasters. More important, the positive reform-growth relationship is shown to be highly heterogeneous and to be influenced by a country's constraints on the authority of the executive power and by its distance from the technology frontier. Finally, there is some evidence that crises, defined as severe growth downturns, are associated with subsequent reform upticks.
Lingua originaleEnglish
pagine (da-a)946-968
Numero di pagine23
RivistaTHE REVIEW OF ECONOMICS AND STATISTICS
Volume95
DOI
Stato di pubblicazionePubblicato - 2013

Keywords

  • Financial reforms, real sector reforms, economic growth, growth spells, distance from the technological frontier, constraints to the executive authority

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