Summary |
This paper examines the impact on economic performance of structural policies-that is, policies that increase the role of market forces and competition in the economy, while maintaining appropriate regulatory frameworks. It examines the effects of structural reforms on two aspect of economic performance-medium-run growth and macroeconomic stability and resilience-from a global standpoint, and in so doing improves the analytical basis of IMF policy advice by drawing on the lessons from broad cross-country experience. Underpinning the results was a major data collection effort, involving the compilation of indicators of structural reform for a large sample of 91 developing and developed countries over the past three decades. The resulting dataset is unique in its country and time coverage. Compared to most previous efforts, it is also much broader in terms of the sectoral coverage of reforms-including indicators of liberalization in domestic product markets, international trade, several indicators of liberalization of the domestic financial sector, and measures of external capital account liberalization. The dataset’s breadth along the sectoral dimension is essential to address issues of reform sequencing, an area that has generated much thought from a theoretical standpoint, but where systematic cross-country evidence-as opposed to smaller-scale case studies-is sorely lacking.
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