The Political Economy of Reform / Edition 1

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Overview

In this book, Federico Sturzenegger and Mariano Tommasi propose formal models to answer some of the questions raised by the recent reform experience of many Latin American and EastEuropean countries. They apply common standards of analytical rigor to the study of economic and political behavior, assuming political agents to be rational and forward-looking, with expectations consistent with the properties of the underlying model.The book is organized around three basic questions: first, why do reforms take place? Second, how are reforms implemented? And third, which candidates are most likely to undertake reform? Although most of the chapters deal with policy issues in developing economies, the findings also apply to areas such as social security and health care reform in industrialized countries.

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What People Are Saying

From the Publisher
"The Asian crises have once again highlighted the importance ofpolitics in economic policy formulation. This volume is thereforeespecially welcome, containing many of the promising models of thepolitical economy of reform (or non-reform)." Anne O. Krueger ,Herald L.and Caroline L. Ritch Professor ofHumanities and Sciences, Economics Department, StanfordUniversity
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Product Details

  • ISBN-13: 9780262194006
  • Publisher: MIT Press
  • Publication date: 8/17/1998
  • Edition description: New Edition
  • Edition number: 1
  • Pages: 386
  • Product dimensions: 6.10 (w) x 9.10 (h) x 1.20 (d)

Meet the Author

Federico Sturzenegger is President of the Banco Ciudad de Buenos Aires. He is the coauthor,with Jeromin Zettelmeyer, of Debt Defaults and Lessons from a Decade of Crises (MIT Press, 2007).

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Table of Contents

1 Introduction 1
I Why? (The Positive Political Economy of Reforms) 35
Inaction and Delay 37
2 The Political Economy of Delayed Reform 39
3 Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty 61
4 Why Are Stabilizations Delayed? 77
5 Fiscal Conservatism as a Response to the Debt Crisis 105
6 The Benefit of Crises for Economic Reforms 127
Dynamics 143
7 Recurrent High Inflation and Stabilization: A Dynamic Game 145
8 The Common Property Approach to the Political Economy of Fiscal Policy 165
9 Fiscal Discipline in a Union 185
10 The Rush to Free Trade in the Developing World: Why So Late? Why Now? Will It Last? 209
II How? (Strategies for Reformers) 241
11 The Design of Reform Packages under Uncertainty 243
12 Gradualism versus Big-Bang: Speed and Sustainability of Reforms 269
13 Sequencing of Economic Reforms in the Presence of Political Constraints 285
III Who? (The Identity of Reformers) 305
14 Promises, Promises: Credible Policy Reform via Signalling 307
15 Credibility of Policymakers and of Economic Reforms 329
16 The Feasibility of Low Inflation: Theory with an Application to the Argentine Case 349
Index 377
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