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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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Advancing pension and labour-market reforms

This chapter aims to isolate the factors that may impede the adoption and implementation of reforms to pension systems and labour-market institutions, and to identify the conditions, sequencing and packaging of successful reforms. The chapter begins by setting the economic and political scene for implementing pension and labour-market reforms. It briefly discusses the factors that make such reforms necessary and, in some countries, more or less unavoidable. The perceptions that individuals in these countries have of the economic risks and their attitudes towards the feasibility of reforms are also analysed. In an effort to take stock of reform processes so far, the main pension and labour-market reforms implemented (or attempted) in OECD countries are then reviewed. The analysis of these reforms (or reform failures) is crucial to identifying the main elements leading to a successful reform process. Previous research on the political economy of reforms has identified several economic and political factors that may be decisive for success. These are summarised next, focusing on empirical testing of the relevant theories. Finally, in the light of these results, the chapter ends with a brief outline of feasible reform strategies.

English

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