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The Impact of Growth Performance and Political Regime Type on Economic Policy Liberalization

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  • Hans Pitlik

    (WIFO)

Abstract

The paper investigates empirically the interaction between economic growth performance and political institutions in producing free-market reform. In particular, we explore whether political regime types systematically shape government policy responses to good or bad growth performance, employing panel econometric techniques and using recently updated data for economic reform and political institutions. Contrary to conventional wisdom we find that a bad growth performance is conducive to reforms only in democracies, but not in autocracies. Democratic rule seems to be favourable for policy liberalisation in general, but a very good growth performance weakens liberalisation incentives considerably.

Suggested Citation

  • Hans Pitlik, 2007. "The Impact of Growth Performance and Political Regime Type on Economic Policy Liberalization," WIFO Working Papers 300, WIFO.
    • Handle: RePEc:wfo:wpaper:y:2007:i:300
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    References listed on IDEAS

    as
    1. Jean Paul Azam & Robert Bates & Bruno Biais, 2009. "Political Predation And Economic Development," Economics and Politics, Wiley Blackwell, vol. 21(2), pages 255-277, July.
    2. Mr. A. J Hamann & Mr. Alessandro Prati, 2002. "Why Do Many Disinflations Fail? the Importance of Luck, Timing, and Political Institutions," IMF Working Papers 2002/228, International Monetary Fund.
    3. Keefer, Philip, 2004. "What does political economy tell us about economic development - and vice versa?," Policy Research Working Paper Series 3250, The World Bank.
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    Keywords

    crisis hypothesis; democracy; market-oriented reform; political credibility;
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