Crises, What Crises? New Evidence on the Relative Roles of Political and Economic Crises in Begetting Reforms

        with Cheng Hsiao and Jeff Nugent

        Published in Journal of Development Studies 46 (10): 1670-1691, November 2010

        Crises beget reforms is a powerful hypothesis. But which type of crises economic or political - are the main drivers of
        structural reforms? To answer this question, we construct measures of labor market and trade liberalization and the two types
        of crises for a panel of about 100 developed and developing countries between 1960 and 2000. We find that political crises
        are more important determinants of structural reforms than economic crises. This finding is robust to the inclusion of
        interdependencies between crises, feedbacks between reforms, different estimators and various alternative measures of crises.

        Download latest draft (January 2010) version     here

        Download working paper version (July 2006):     IZA DP     CEPR DP

        Web appendix is available here

        Data set  is available here

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