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Constitutionalism and credibility in reforming economies1

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  • Raj M. Desai
  • Anders Olofsgård

Abstract

There has been relatively little investigation of the effect of constitutional transformations on the economic transition in post‐communist countries. We develop a simple signalling model in which constitutionalism – a commitment to limit political power and provide judicial defence of basic rights – reinforces the credibility of pro‐market candidates’ electoral promises and boosts public support for economic reforms. These findings are tested using opinion poll data on public support for reform in Central and Eastern Europe, and in the former Soviet Union, in the 1990s. In a two‐stage procedure we show that public support for market reforms is higher in countries where incumbents have taken deliberate steps to increase political accountability and judicial independence. Public support also spurs actual economic reform.

Suggested Citation

  • Raj M. Desai & Anders Olofsgård, 2006. "Constitutionalism and credibility in reforming economies1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 14(3), pages 479-504, July.
    • Handle: RePEc:bla:etrans:v:14:y:2006:i:3:p:479-504
    DOI: 10.1111/j.1468-0351.2006.00261.x
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    References listed on IDEAS

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    1. Razvan Vlaicu, 2008. "Democracy, Credibility, and Clientelism," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 24(2), pages 371-406, October.
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    Cited by:

    1. Apolte, Thomas, 2013. "The supply of democracy explaining voluntary democratic transition," CIW Discussion Papers 6/2013, University of Münster, Center for Interdisciplinary Economics (CIW).
    2. Alexander Salhi & Andreas Kern & Martin Rößler, 2010. "Growth Patterns in the CIS-8: A Political Economy Approach," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 17(4), pages 686-708, December.
    3. Mano, Viktorija, 2021. "Domestic elite support for reforms in transition economies: the case of North Macedonia," SEER Journal for Labour and Social Affairs in Eastern Europe, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 24(2), pages 219-242.

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