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The Political Economy of Reform

Lessons from Pensions, Product Markets and Labour Markets in Ten OECD Countries

image of The Political Economy of Reform

This report examines why some policy reforms get implemented and others languish by examining 20 structural reform efforts in 10 OECD countries over the past two decades. The case studies cover a wide variety of reform attempts in three key areas: pensions, labour- and product-market regulation. Key factors in the political, economic and reform-specific arenas are identified as helping or hindering reform, and these findings are cross-checked using a relatively simple set of Spearman rank correlations. The report’s two-pronged analytical approach – quantitative and qualitative – results in unique insights for policy makers designing, adopting and implementing structural policy reforms.

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Germany

The Hartz reforms of the labour market, 2002-05

The adoption and implementation of the four laws known as the Hartz reforms in 2002-05 marked the biggest change in German labour-market policy in a generation. The reforms’ focus was on the supply side, and their adoption followed a long period in which labour-market reform had largely been stalled. Though adopted and implemented smoothly, the reform laws subsequently generated a backlash.

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