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Title: What determines the likelihood of structural reforms?
Authors: Agnello, Luca
Castro, Vitor
Jalles, Joao Tovar
Sousa, Ricardo M.
Keywords: Structural reforms
Crisis episodes
Political setup
Issue Date: 2014
Publisher: © Elsevier
Citation: AGNELLO, L. ... et al, 2014. What determines the likelihood of structural reforms? European Journal of Political Economy, 37, pp. 129-145.
Abstract: 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.
Description: This paper was accepted for publication in the journal European Journal of Political Economy and the definitive published version is available at http://dx.doi.org/10.1016/j.ejpoleco.2014.10.007
Sponsor: Castro and Sousa acknowledge financial support from FEDER Funds via the Competitiveness Factors' Operational Program - COMPETE and national Funds via FCT - the Portuguese Foundation for Science and Technology in the context of project "FCOMP-01-0124-FEDER-037268 (PEst-C/EGE/UI3182/2013)".
Version: Accepted for publication
DOI: 10.1016/j.ejpoleco.2014.10.007
URI: https://dspace.lboro.ac.uk/2134/25015
Publisher Link: http://dx.doi.org/10.1016/j.ejpoleco.2014.10.007
ISSN: 0176-2680
Appears in Collections:Published Articles (Economics)

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