Underperforming reformers: Examining disappointing cases of economic reforms

Justin Callais and Kerianne Lawson

Kyklos, 2024, vol. 77, issue 3, 593-615

Abstract: While pro‐market economic institutions are a strong and causal predictor of economic development, such institutions are not expected to have the same impact across countries. Furthermore, there are actually a few instances where countries that enacted market‐friendly reforms had negative economic growth soon after. Examining 49 cases of large and sustained increases in economic freedom over a five year window, we find 10 cases that were followed by low/negative economic growth thereafter. We consider various potential determinants of failed reforms by comparing different measures between the successful and failed reforming countries. Our strongest evidence points to the following as plausible reasons for failed reforms: culture (high levels of power distance, low levels of individualism, and low levels of generalized trust), areas of economic freedom that countries reformed (less focus on sound monetary policy, more focus on limiting the size of government, and more variance between the five areas), and autocratic political institutions.

Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/kykl.12379

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:kyklos:v:77:y:2024:i:3:p:593-615

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0023-5962

Access Statistics for this article

Kyklos is currently edited by Rene L. Frey

More articles in Kyklos from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().