The Political Economy of Reform

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

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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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Sickness insurance, 1990-2002

Throughout the 1990s and early 200s, Swedish governments tried to address the problem of rapidly rising expenditures on sickness insurance, as well as the accompanying growth in the number of days lost as a result of sickness. Successive governments introduced numerous adjustments, but they made little sustained progress in tackling the problem until 2003. This case study examines the reforms of the 1990s and the reasons why the proved so difficult to implement and sustain despite broad agreement on the need for reform.

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