It is argued that crises open up a window of opportunity to implement policies that otherwise would not have the necessary political backing. We show that not only is the crises-reforms nexus unfounded in the data, but rather crises are associated with a reversal of liberalisation interventions depending on the institutional environment. We find that, in democratic countries, crises occurrences have no significant impact on liberalisation measures. On the contrary, after a crisis, autocracies reduce liberalisation in multiple economic sectors, which we interpret as the fear of regime change leading non-democratic rulers to please vested economic interests.

Policies in hard times: assessing the impact of financial crises on structural reforms

Gokmen, Gunes;Nannicini, Tommaso;Onorato, Massimiliano Gaetano;
2021-01-01

Abstract

It is argued that crises open up a window of opportunity to implement policies that otherwise would not have the necessary political backing. We show that not only is the crises-reforms nexus unfounded in the data, but rather crises are associated with a reversal of liberalisation interventions depending on the institutional environment. We find that, in democratic countries, crises occurrences have no significant impact on liberalisation measures. On the contrary, after a crisis, autocracies reduce liberalisation in multiple economic sectors, which we interpret as the fear of regime change leading non-democratic rulers to please vested economic interests.
2021
Gokmen, Gunes; Nannicini, Tommaso; Onorato, Massimiliano Gaetano; Papageorgiou, Chris
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11565/4052247
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