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The Effects Of Structural Reforms On Economic Growth: Evidence From Selected Countries Within The Imf-Supported Programs

Author

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  • Ömer Yalçınkaya

    (Atatürk University, Faculty of Economics and Administrative Sciences, Department of Economics)

  • Muhammet Daştan

    (Ağrı İbrahim Çeçen University, Faculty of Economics and Administrative Sciences, Department of Economics)

Abstract

This study investigates the effects of structural reforms in fiscal, financial, trade, and real sectors on economic growth for 56 countries within the IMF-Supported Program over the 2002-19 period. Using a novel data- base (IMF Monitoring of Fund Arrangements-MONA), it constructs newstructural reform indexes for each sector employing the Z-score approach. The present study highlights that all structural reforms except for real sec- tor reforms in all models, constructed based on the extended Cobb-Douglas production function, have a positive and statistically significant impact on economic growth. The robustness of the models is confirmed by using two different structural reform indexes for each sector and two different estimators considering cross-sectional dependence. Empirical findings point to the structural reforms being potentially key factors that provide strong long-term growth performance for countries. Hence, along with the relevant traditional policies and sufficiently developed institutions, policymakers should extend the structural reforms to lift potential growth and provide lasting economic recovery.

Suggested Citation

  • Ömer Yalçınkaya & Muhammet Daştan, 2023. "The Effects Of Structural Reforms On Economic Growth: Evidence From Selected Countries Within The Imf-Supported Programs," Ekonomski pregled, Hrvatsko društvo ekonomista (Croatian Society of Economists), vol. 74(5), pages 633-662.
    • Handle: RePEc:hde:epregl:v:74:y:2023:i:5:p:633-662
    DOI: 10.32910/ep.74.5.1
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    Keywords

    Structural reforms; Economic growth; Panel data analysis.;
    All these keywords.

    JEL classification:

    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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