Policies in Hard Times: Assessing the Impact of Financial Crises on Structural Reforms
Gunes Gokmen (),
Tommaso Nannicini (),
Massimiliano Onorato () and
Chris Papageorgiou ()
No def061, DISCE - Working Papers del Dipartimento di Economia e Finanza from Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE)
It is argued that crises open up a window of opportunity to implement policies that otherwise would not have the necessary political backing. The argument goes that the political cost of deep reforms declines as crises unravel structural problems that need to be urgently recti ed and the public is more willing to bear the pains associated with such reforms. This paper casts doubt on this prevalent view by showing that not only the crises-reforms hypothesis is unfounded in the data, but rather crises are associated with slowing structural reforms depending on the institutional environment. In particular, we look at measures of liberalization in international trade, agriculture, network industries, and nancial markets. We nd that, after a nancial crisis, democracies neither open nor close their economy. On the contrary, autocracies reduce liberalizations in multiple economic sectors, as the fear of regime change might lead non- democratic rulers to please vested economic interests.
Keywords: Financial crises; structural reforms; institutional systems; IMF programs; govern- ment crises; public opinion. (search for similar items in EconPapers)
JEL-codes: E44 G01 L51 P16 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed
Downloads: (external link)
http://dipartimenti.unicatt.it/economia-finanza-def061.pdf First version, 2017 (application/pdf)
Working Paper: Policies in Hard Times: Assessing the Impact of Financial Crises on Structural Reforms (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ctc:serie1:def061
Access Statistics for this paper
More papers in DISCE - Working Papers del Dipartimento di Economia e Finanza from Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE) Contact information at EDIRC.
Bibliographic data for series maintained by Simone Moriconi ().