EconPapers    
Economics at your fingertips  
 

Growth‐equity trade‐offs in structural reforms

Jonathan Ostry (), Andrew Berg () and Siddharth Kothari

Scottish Journal of Political Economy, 2021, vol. 68, issue 2, 209-237

Abstract: Do structural reforms that aim to boost potential output also change the distribution of income? We shed light on this question by looking at the broad patterns in the cross‐country data covering advanced, emerging‐market, and low‐income countries. Our main finding is that there is indeed evidence of a growth‐equity trade‐off for some important reforms. Financial and capital account liberalization seem to increase both growth and inequality, as do some measures of liberalization of current account transactions. Reforms aimed at strengthening the impartiality of and adherence to the legal system seem to entail no growth‐equity trade‐off—such reforms are good for growth and do not worsen inequality. The results for our index of network reforms as well as our measure of the decentralization of collective labor bargaining are the weakest and least robust, potentially due to data limitations. We also ask: If some structural reforms worsen inequality, to what degree does this offset the growth gains from the reforms themselves? While higher inequality does dampen the growth benefits, the net effect on growth remains positive for most reform indicators.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/sjpe.12265

Related works:
Working Paper: Growth-Equity Trade-offs in Structural Reforms (2018) Downloads
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:scotjp:v:68:y:2021:i:2:p:209-237

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0036-9292

Access Statistics for this article

Scottish Journal of Political Economy is currently edited by Tim Barmby, Andrew Hughes-Hallett and Campbell Leith

More articles in Scottish Journal of Political Economy from Scottish Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2023-02-03
Handle: RePEc:bla:scotjp:v:68:y:2021:i:2:p:209-237