Structural Reforms and Elections: Evidence from a World-Wide New Dataset

59 Pages Posted: 3 Feb 2020 Last revised: 6 Jul 2022

See all articles by Alberto F. Alesina

Alberto F. Alesina

Harvard University - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Davide Furceri

International Monetary Fund (IMF)

Jonathan D. Ostry

Georgetown University; International Monetary Fund (IMF)

Chris Papageorgiou

International Monetary Fund (IMF) - Research Department

Dennis P. Quinn

Georgetown University - Department of Strategy/Economics/Ethics/Public Policy

Multiple version iconThere are 2 versions of this paper

Date Written: January 2020

Abstract

We assemble two unique databases. One is on reforms in domestic finance, external finance, trade, product markets and labor markets, which covers 90 advanced and developing economies from 1973 to 2014. The other is on electoral results and timing of elections. In the 66 democracies considered in the paper, we show that liberalizing reforms engender benefits for the economy, but they materialize only gradually over time. Partly because of this delayed effect, and possibly because voters are impatient or do not anticipate future benefits, liberalizing reforms are costly to incumbents when implemented close to elections. We also find that the electoral effects depend on the state of the economy at the time of reform: reforms are penalized during contractions; liberalizing reforms undertaken in expansions are often rewarded. Voters seem to attribute current economic conditions to the reforms without fully internalizing the delay that it takes for reforms to bear fruit.

Suggested Citation

Alesina, Alberto F. and Furceri, Davide and Ostry, Jonathan D. and Papageorgiou, Chris and Quinn, Dennis P., Structural Reforms and Elections: Evidence from a World-Wide New Dataset (January 2020). NBER Working Paper No. w26720, Available at SSRN: https://ssrn.com/abstract=3530691

Alberto F. Alesina (Contact Author)

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
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Centre for Economic Policy Research (CEPR)

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National Bureau of Economic Research (NBER)

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Davide Furceri

International Monetary Fund (IMF) ( email )

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Jonathan D. Ostry

Georgetown University ( email )

Washington, DC 20057
United States

International Monetary Fund (IMF) ( email )

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Washington, DC 20431
United States

Chris Papageorgiou

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Dennis P. Quinn

Georgetown University - Department of Strategy/Economics/Ethics/Public Policy ( email )

Washington, DC 20057
United States

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