Reform from Within

Aaron Tornell

No 6497, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We present a model of endogenous institutional change that rationalizes reforms that have taken place in the context of economic crisis and drastic political change. Most of the reforms have been initiated by powerholders, even though they have ended worse off relative to the status quo. The first point we make is that reform is the tool used by some powerful groups to limit the power of their political opponents. The second point is that groups with common access' to the economy's resources find it individually rational to overappropriate resources. As a result the economy deteriorates. When the economy reaches a crisis conflict among groups erupts. Reform is the result of this conflict.

JEL-codes: C73 D90 (search for similar items in EconPapers)
Date: 1998-04
Note: IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

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Working Paper: Reform from Within (1998)
Working Paper: Reform from Within (1998)
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