Structural Reforms and Growth in Transition

30 Pages Posted: 15 Dec 2013

See all articles by Jan Babecký

Jan Babecký

Czech National Bank (CNB)

Tomas Havranek

Charles University in Prague; Centre for Economic Policy Research (CEPR)

Date Written: January 2014

Abstract

The present fiscal difficulties of many countries amplify the call for structural reforms. To provide stylized facts on how reforms worked in the past, we quantitatively review 60 studies estimating the relationship between reforms and growth. These studies examine structural reforms carried out in 26 transition countries around the world. Our results show that an average reform caused substantial costs in the short run, but had strong positive effects on long‐run growth. Reforms focused on external liberalization proved to be more beneficial than others in both the short and long run. The findings hold even after correction for publication bias and misspecifications present in some primary studies.

Keywords: Structural reforms, growth, transition economies, meta‐analysis, Bayesian model averaging

Suggested Citation

Babecky, Jan and Havranek, Tomas, Structural Reforms and Growth in Transition (January 2014). Economics of Transition, Vol. 22, Issue 1, pp. 13-42, 2014, Available at SSRN: https://ssrn.com/abstract=2367576 or http://dx.doi.org/10.1111/ecot.12029

Jan Babecky (Contact Author)

Czech National Bank (CNB) ( email )

Na Prikope 28
CZ-11503 Praha 1
Czech Republic

Tomas Havranek

Charles University in Prague ( email )

Celetná 13
Praha 1, 116 36
Czech Republic

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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