Commitment, coordination failures, and delayed reforms

• 成果类型: Article
• 署名作者: Chang, R
• 署名单位: Rutgers University System; Rutgers University New Brunswick
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/S0304-3932(00)00045-3
• 发表日期: 2001
• 页码: 123-144
• 关键词: delayed reforms; stabilizations; political economy

摘要

Economic reforms are often postponed even if they ale clearly beneficial. I argue that this may reflect a government's need to improve its reputation before it can enact a reform successfully. I study a model in which the government has a commitment problem in setting taxes that pay for reform. Market expectations about future policy, which determine investment, become fundamental for the reform's success. Reform may be postponed as the government builds credibility with a period of low taxes. Depending on expectations, better equilibria may exist. The robustness of this explanation and its policy implications are discussed. (C) 2001 Published by Elsevier Science B.V.