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Making Reform Happen

Lessons from OECD Countries

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OECD countries have made significant reform progress in recent decades, in fields as diverse as competition policy, health care and the environment. How have they done it? And why have reforms advanced in some places and stalled in others? This collection of essays analyses the reform experiences of the 30 OECD countries in nine major policy domains in order to identify lessons, pitfalls and strategies that may help foster policy reform in the future. While taking full account of the tremendous differences in the political and institutional settings in which these reforms were undertaken, the authors highlight a number of common challenges and potential solutions that hold good across both countries and issue areas. They show that the scope for cross-national policy learning is enormous.

The importance of such reform lessons is all the greater in the wake of the global financial and economic crisis. As OECD governments confront the challenge of trying to restore public finances to health without undermining the recovery, they will need to pursue a careful mix of fiscal policies and growth-enhancing structural reforms. Designing, adopting and implementing such a policy mix will require the crafting of effective reforms and effective strategies for implementing them.

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Achieving and sustaining fiscal consolidation

This chapter begins with an examination of the factors that condition the propensity for governments to take on debt: political and governance factors, public attitudes to debt, the role of financial markets and the general imprecision about which debt targets should be pursued. It then examines the evidence, based largely on pooled regressions over large country samples, regarding the exogenous and policy-related factors which have affected the success of fiscal consolidation efforts. The chapter goes on to examine the role of fiscal institutions: rules and autonomous agencies in fiscal retrenchment. The chapter’s final section sums up and assesses how the political economy context has changed with the financial crisis, giving some pointers as to what may be needed to re-establish a consolidation path and make it less prone to setbacks.

English

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