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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Key determinants of successful structural reform

This chapter presents the main lessons that emerge from 20 studies of structural reform episodes in member countries completed during 2007-08. This exercise points to a number of striking regularities in the way reform processes unfold, and it considers the role of political and economic factors exogenous to the reform processes under study. It turns to issues related to scope and timing of reform, particularly speed and sequencing. It also deals with questions of consultation and public communication and the way reformers deal with actual or potential opponents of reform.

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