International organizations and the political economy of reforms

• 成果类型: Article
• 署名作者: Galiani, Sebastian; Torre, Ivan; Torrens, Gustavo
• 署名单位: University System of Maryland; University of Maryland College Park; The World Bank; Indiana University System; Indiana University Bloomington; National Bureau of Economic Research
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2019.07.004
• 发表日期: 2019
• 关键词: Structural reform; Counter-reform; international organizations

摘要

We develop a simple dynamic model of policy reform that captures some of the determinants that underlie the differences between the reform paths taken by a number of countries since the early 1990s. The model focuses on the interaction between domestic institutions and international organizations that promote reform, on the one hand, and the political incentives for reversing reforms, on the other. At equilibrium, there are three types of reform paths. A country can undergo a full-scale, lasting reform, can carry out a partial but lasting reform, or can go through cycles of reforms and costly counter-reforms. Domestic institutions, along with the incentives provided by international organizations, determine the equilibrium path. A politically myopic international organization may induce cycles of reforms and costly counter-reforms, thereby reducing the country's well-being. An international organization that only provides funds to promote reforms may have a less beneficial effect than one that assists the country with fresh funds to defend reforms when there is a risk of reversal. International funds that promote reforms can also influence domestic institutions. For example, due to the intervention of an international organization, countries could have incentives to dismantle institutions that build up reversal cost and/or do not fully build their fiscal capacity. (C) 2019 Elsevier B.V. All rights reserved.