6533b7d1fe1ef96bd125ccf2

RESEARCH PRODUCT

What determines the likelihood of structural reforms?

Ricardo M. SousaRicardo M. SousaLuca AgnelloJoão Tovar JallesVitor CastroVitor Castro

subject

MacroeconomicsG28Economics and EconometricEconomics and EconometricsCrisis episodemedia_common.quotation_subjectCrisis episodesRecessionPolitical setupSocial SciencesFinancial systemGlobalisationRecessionPoliticsGlobalization0502 economics and business050602 political science & public administrationEconomics050207 economicsStructural reformmedia_commonP1105 social sciences1. No povertyRecessionsSettore SECS-P/02 Politica EconomicaP16External debtCapital account0506 political scienceStructural reforms8. Economic growthPolitical Science and International Relations

description

We use data for a panel of 60 countries over the period 1980–2005 to investigate the main drivers of the likelihood of structural reforms. We find that: (i) external debt crises are the main trigger of financial and banking reforms; (ii) inflation and banking crises are the key drivers of external capital account reforms; (iii) banking crises also hasten financial reforms; and (iv) economic recessions play an important role in promoting the necessary consensus for financial, capital, banking and trade reforms, especially in the group of OECD-countries. Additionally, we also observe that the degree of globalisation is relevant for financial reforms, in particular in the group of non-OECD countries. Moreover, an increase in the income gap accelerates the implementation of structural reforms, but increased political fragmentation does not seem to have a significant impact.

yearjournalcountryeditionlanguage
2015-01-01
https://hdl.handle.net/1822/32631