Reform, Uncertainty and Spillovers - A Gravity Model Approach
Elira Karaja () and
Ariane Tichit ()
No 3745, CESifo Working Paper Series from CESifo Group Munich
Reforms often occur in waves, seemingly cascading from country to country. We argue that such reform waves may be driven by informational spillovers: uncertainty about the outcome of reform is reduced by learning from the experience of similar countries. We motivate this hypothesis with a simple theoretical model and then test it empirically. Our results confirm the presence of informational spillovers with respect to political liberalization but offer little support for informational spillovers with respect to economic reforms.
Keywords: reform; transition; institutions; uncertainty; spillovers; contagion (search for similar items in EconPapers)
JEL-codes: O11 O47 P27 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_3745
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