Relative Returns to Policy Reform : Evidence from Controlled Cross-Country Regressions

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collection.link.5
https://openknowledge.worldbank.org/handle/10986/9
collection.name.5
Policy Research Working Papers
dc.contributor.author
de Castro, Alexandre Samy
dc.contributor.author
Goldin, Ian
dc.contributor.author
Pereira da Silva, Luiz A.
dc.date.accessioned
2014-08-01T19:41:11Z
dc.date.available
2014-08-01T19:41:11Z
dc.date.issued
2002-10
dc.description.abstract
The authors aim at contributing to understand the dispersion of returns from policy reforms using cross-country regressions. The authors compare the "before reform" with "after reform" GDP growth outcome of countries that undertook import-liberalization and fiscal policy reforms. They survey a large sample (about 54) of developing countries over the period 1980-99. The benefits of openness to trade and fiscal prudence have been extensively identified in the growth literature, but the evidence from simple cross-section analysis can sometimes be inconclusive and remains vulnerable to criticism on estimation techniques, such as identification, endogeneity, multi-colinearity, and the quality of the data. The authors use a different analytical framework that establishes additional controls. First, they construct a counterfactual control group. These are countries that-under specific thresholds-did not introduce policy reforms under scrutiny. Second, the authors also try to use the most appropriate variable of policy reform, for example, exogenous changes in import-tariffs instead of the endogenous sum of all trade flows. Third, the authors try to base the before-after reform comparison on the most accurate date for the beginning of a policy reform period (instead of comparing averages over fixed intervals of time). Once these controls are set, they explain the difference between average GDP growth rates during the country-specific post and the pre-reform periods, relative to the average GDP growth of the relevant control group. The explanatory variables in the regressions include the standard growth-regression controls. The results are the following: 1) With a better measurement and timing of the policy reforms, the growth effect (the "returns on reform") is generally smaller than in previous papers. 2) There is evidence of contingent relationships between policy and growth, corresponding to the country's size, its export profile, and its governance. 2) Within the group of policy reformers, some countries have exhibited a relatively weaker growth response. Overall, the findings suggest that more accurate measurement and definition of the timing of reforms does not strengthen the significance of the effects of reforms on GDP growth. In fact, the effects are weaker than indicated in most cross-section studies. This suggests that the policy implications to be derived from these relationships should be treated with even more caution than previously thought.
en
dc.identifier
http://documents.worldbank.org/curated/en/2002/10/2032622/relative-returns-policy-reform-evidence-controlled-cross-country-regressions
dc.identifier.uri
http://hdl.handle.net/10986/19222
dc.language
English
dc.publisher
World Bank
dc.relation.ispartofseries
Policy Research Working Paper; No. 2898
dc.rights
CC BY 3.0 IGO
dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo/
dc.subject
AGRICULTURAL EXPORTS
dc.subject
AGRICULTURAL PRODUCTS
dc.subject
AGRICULTURE
dc.subject
ANDEAN PACT
dc.subject
ANTIDUMPING
dc.subject
AVERAGE GROWTH
dc.subject
AVERAGE GROWTH RATE
dc.subject
AVERAGE TARIFF
dc.subject
AVERAGE TARIFF RATE
dc.subject
AVERAGE TARIFF RATES
dc.subject
AVERAGE TARIFFS
dc.subject
AVERAGE TRADE
dc.subject
BALANCE OF PAYMENTS
dc.subject
BALANCE OF PAYMENTS CRISIS
dc.subject
BARRIERS TO IMPORTS
dc.subject
BLACK MARKET
dc.subject
BLACK MARKET PREMIUM
dc.subject
CAPITAL ACCOUNT
dc.subject
CAPITAL ACCUMULATION
dc.subject
CAPITAL STOCK
dc.subject
CD
dc.subject
COMPARATIVE ADVANTAGE
dc.subject
COMPLEX TASK
dc.subject
CONCESSIONS
dc.subject
CONSUMPTION EXPENDITURES
dc.subject
COUNTRY CHARACTERISTICS
dc.subject
COUNTRY REGRESSIONS
dc.subject
COUNTRY SIZE
dc.subject
CROSS- COUNTRY ANALYSIS
dc.subject
CROSS- COUNTRY VARIATION
dc.subject
CROSS-COUNTRY ANALYSIS
dc.subject
CROSS-COUNTRY REGRESSIONS
dc.subject
CURRENCY
dc.subject
CUSTOMS
dc.subject
CUSTOMS UNION
dc.subject
DATA AVAILABILITY
dc.subject
DEBT
dc.subject
DEVELOPED COUNTRIES
dc.subject
DEVELOPING COUNTRIES
dc.subject
DEVELOPMENT ECONOMICS
dc.subject
DEVELOPMENT INDICATORS
dc.subject
ECONOMIC GROWTH
dc.subject
ECONOMIC POLICY
dc.subject
EMPIRICAL EVIDENCE
dc.subject
EQUATIONS
dc.subject
ESTIMATED COEFFICIENTS
dc.subject
ESTIMATION METHOD
dc.subject
ESTIMATION TECHNIQUES
dc.subject
EXCHANGE RATE
dc.subject
EXOGENOUS SHOCK
dc.subject
EXOGENOUS SHOCKS
dc.subject
EXPENDITURES
dc.subject
EXPLANATORY VARIABLES
dc.subject
EXPORT SHARES
dc.subject
EXPORTERS
dc.subject
EXPORTS
dc.subject
EXTERNAL DEBT
dc.subject
EXTERNAL SHOCKS
dc.subject
FACTORS OF PRODUCTION
dc.subject
FINANCIAL LIBERALIZATION
dc.subject
GDP
dc.subject
GDP PER CAPITA
dc.subject
GLOBAL TRADE
dc.subject
GROWTH EFFECT
dc.subject
GROWTH LITERATURE
dc.subject
GROWTH PERFORMANCE
dc.subject
GROWTH RATE
dc.subject
GROWTH RATES
dc.subject
GROWTH REGRESSIONS
dc.subject
HIGH INCOME COUNTRIES
dc.subject
HIGH TARIFFS
dc.subject
HUMAN CAPITAL
dc.subject
IDIOSYNCRATIC SHOCKS
dc.subject
IMPORT DUTIES
dc.subject
IMPORT LIBERALIZATION
dc.subject
IMPORT TARIFFS
dc.subject
INCOME
dc.subject
INCREASE GROWTH
dc.subject
INCREASING MARKET ACCESS
dc.subject
INFLATION
dc.subject
INVESTMENT RATE
dc.subject
INVESTMENT RATES
dc.subject
LAGGED GROWTH
dc.subject
LONG- RUN GROWTH
dc.subject
MACRO POLICY
dc.subject
MACROECONOMIC CONDITIONS
dc.subject
MACROECONOMIC POLICY
dc.subject
MARGINAL COST
dc.subject
MARGINAL EFFECT
dc.subject
MARGINAL EFFECTS
dc.subject
MARKET ACCESS
dc.subject
NEGATIVE EFFECT
dc.subject
NEGATIVE IMPACT
dc.subject
NON-TARIFF BARRIERS
dc.subject
OPEN ECONOMIES
dc.subject
OPENNESS
dc.subject
OPENNESS TO IMPORTS
dc.subject
POLICY ANALYSIS
dc.subject
POLICY IMPLICATIONS
dc.subject
POLICY INSTRUMENTS
dc.subject
POLICY REFORM
dc.subject
POLICY REFORMS
dc.subject
POLICY RESEARCH
dc.subject
POLICY VARIABLES
dc.subject
PRIMARY EDUCATION
dc.subject
PRIMARY PRODUCTS
dc.subject
PRODUCTION FUNCTION
dc.subject
PRODUCTIVITY
dc.subject
PUBLIC INVESTMENT
dc.subject
PUBLIC POLICIES
dc.subject
QUOTAS
dc.subject
REAL INTEREST RATES
dc.subject
REDUCED FORM EQUATION
dc.subject
REGIONAL TRADE
dc.subject
REGIONAL TRADE BLOCS
dc.subject
REGIONAL TRADE SHARES
dc.subject
REGULATORY FRAMEWORK
dc.subject
SAVINGS
dc.subject
SIGNIFICANT REDUCTION
dc.subject
STANDARD DEVIATION
dc.subject
STANDARD GROWTH DETERMINANTS
dc.subject
TARIFF BARRIERS
dc.subject
TARIFF RATE
dc.subject
TARIFF RATES
dc.subject
TARIFF REDUCTION
dc.subject
TAX REVENUES
dc.subject
TAX SYSTEM
dc.subject
TERMS OF TRADE
dc.subject
TERMS OF TRADE SHOCKS
dc.subject
TOTAL FACTOR PRODUCTIVITY
dc.subject
TRADE BARRIERS
dc.subject
TRADE BLOC
dc.subject
TRADE BLOCS
dc.subject
TRADE CONTROL MEASURES
dc.subject
TRADE DIVERSION
dc.subject
TRADE DIVERSION EFFECT
dc.subject
TRADE FLOW
dc.subject
TRADE FLOWS
dc.subject
TRADE INTENSITY
dc.subject
TRADE LIBERALIZATION
dc.subject
TRADE OPENNESS
dc.subject
TRADE POLICIES
dc.subject
TRADE POLICY
dc.subject
TRADE POLICY REVIEW
dc.subject
TRADE POLICY VARIABLES
dc.subject
TRADE REFORM
dc.subject
TRADE REGIME
dc.subject
TRADE RESTRICTIONS
dc.subject
TRADE SHARE
dc.subject
TRADE TAXES
dc.subject
UNDERESTIMATES
dc.subject
URUGUAY ROUND
dc.subject
WORLD TRADE
dc.subject
WTO
dc.subject
POLICY REFORM
dc.subject
CROSS-COUNTRY EXPERIENCE
dc.subject
GROSS DOMESTIC PRODUCT
dc.subject
GROWTH PATTERNS
dc.subject
IMPORT LIBERALIZATION
dc.subject
FISCAL POLICY
dc.subject
PRUDENTIAL REGULATIONS
dc.subject
VARIABILITY
dc.subject
IMPORT TARIFFS
dc.subject
TRADE FINANCE
dc.subject
REGRESSIVE TAXES
dc.subject
GOVERNANCE CAPACITY
dc.title
Relative Returns to Policy Reform : Evidence from Controlled Cross-Country Regressions
en
okr.doctype
Publications & Research :: Policy Research Working Paper
okr.doctype
Publications & Research
okr.docurl
http://documents.worldbank.org/curated/en/2002/10/2032622/relative-returns-policy-reform-evidence-controlled-cross-country-regressions
okr.globalpractice
Poverty
okr.globalpractice
Trade and Competitiveness
okr.globalpractice
Health, Nutrition, and Population
okr.googlescholar.linkpresent
yes
okr.identifier.doi
10.1596/1813-9450-2898
okr.identifier.externaldocumentum
000094946_02101904244924
okr.identifier.internaldocumentum
2032622
okr.identifier.report
WPS2898
okr.language.supported
en
okr.pdfurl
http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2002/11/01/000094946_02101904244924/Rendered/PDF/multi0page.pdf
en
okr.sector
Public Administration, Law, and Justice :: Central government administration
okr.topic
Health, Nutrition and Population :: Public Health Promotion
okr.topic
International Economics and Trade :: Trade and Regional Integration
okr.topic
Health Monitoring and Evaluation
okr.topic
International Economics and Trade :: Trade Policy
okr.topic
International Economics and Trade :: Free Trade
okr.topic
Economic Theory and Research
okr.topic
Poverty Reduction :: Achieving Shared Growth
okr.topic
Environmental Economics and Policies
okr.unit
Office of the Senior Vice President and Chief Economist, Development Economics
okr.volume
1

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