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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The Netherlands

Rent deregulation, 2004-07

Around 95% of Dutch rents are regulated, accounting for almost 44% of the housing market. In 2004, the government proposed reducing the share of regulated rents in stages. Although the rent bill eventually passed the lower house of the States-General, it was still before the upper chamber at the time of the November 2006 general election. The coalition agreement that defined the new government programme after the election stipulated that it be withdrawn and that rent increases be limited. Three years’ debate over partial liberalisation thus ended with a shift towards tighter regulation.

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