Structural Reforms and Economic Growth: A Meta-Analysis
This paper evaluates the impact of structural reforms, mainly liberalization and privatization, on economic growth. To provide stylized facts on how such reforms worked in the past, we quantitatively review 60 studies that estimate the relation between reforms and growth empirically. These studies examine structural reforms carried out in 26 transition and post-transition countries around the world. Our results show that a typical reform caused substantial costs in the short run, but had strong positive effects on long-run growth. Reforms focused on external liberalization proved to be more beneficial than other types of reform in both the short and long run. The findings hold even after correction for publication bias and misspecifications present in some primary studies.
JEL codes: C83, O11, P21
Keywords: Bayesian model averaging, growth, meta-analysis, structural reforms, transition economies
Issued: August 2013
Download: CNB WP No. 8/2013 (pdf, 663 kB)