On the Speed of Economic Reform – A Tale of the Tortoise and the Hare: Evidence from Transition Countries

Bruno Merlevede and Koen Schoors

Journal of Economic Policy Reform, 2007, vol. 10, issue 1, 29-50

Abstract: We analyse how the choice of reform speed, foreign direct investment (FDI) and economic growth affect one another. New reforms affect economic growth negatively, whereas the level of past reform leads to higher growth and attracts FDI. We simulate the impact of big bang and gradualist strategies on economic growth. This is only meaningful in the presence of reform reversals, which requires aggregate uncertainty about the appropriate reform. We find that even relatively small ex ante reversal probabilities suffice to tilt the balance in favour of gradualism. The case for gradualism gains strength if policymakers are short‐sighted, but weakens if voters are myopic.

Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://hdl.handle.net/10.1080/17487870701213573 (text/html)
Access to full text is restricted to subscribers.

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:taf:jecprf:v:10:y:2007:i:1:p:29-50

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/GPRE20

DOI: 10.1080/17487870701213573

Access Statistics for this article

Journal of Economic Policy Reform is currently edited by Dr Judith Clifton

More articles in Journal of Economic Policy Reform from Taylor and Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().