What triggers reforms?

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A previous post by Pablo on the political cost of market reforms suggests that the incentive to reform depends on the impact of such reforms on the re-election chances of the incumbent government, and how much the president or party in power cares about re-election relative to other (enlightened) objectives.

While these are important factors, existing studies show that they are not the only ones as far as the incentive to reform is concerned. Below, I report the list of possible reform triggers compiled by Williamson (1994, The Political Economy of Policy Reform) and based on various case studies and anecdotal evidence. Note that the list is not the final word on the determinants of reforms. Rather, it is more in the nature of popular beliefs with some supporting evidence. Williamson himself rejects some of the listed factors as true determinants of reforms, beyond a few specific cases.

  1. Policy reforms emerge in response to crisis
  2. Strong external support (aid) is an important condition for successful reform
  3. Authoritarian regimes are best at carrying out reform
  4. Policy reform is a right-wing program
  5. Reformers enjoy a “honeymoon period” of support before opposition build-up
  6. Reforms are difficult to sustain unless the government has a solid base of legislative support
  7. A government may compensate for the lack of strong base of support if the opposition is weak and fragmented
  8. Social consensus is a powerful factor impelling reform
  9. Visionary leadership is important
  10. A coherent and united economic team is important
  11. Successful reform requires economists in positions of political responsibility
  12. Successful reform requires a comprehensive program capable of rapid implementation
  13. Reformers should make their intentions to the general public
  14. Reformers should make good use of the media
  15. Reform becomes easier if the losers are compensated
  16. Sustainability can be enhanced by accelerating the emergence of winners


Mohammad Amin

Private Sector Development Specialist

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