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What Do We Know about the Political Economy of Economic Policy Reform?

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  • Haggard, Stephan
  • Webb, Steven B
Abstract
The recent wave of democratization in developing countries and in formerly communist ones has sparked renewed interest in the relation between politics and economic adjustment. Adjustment programs, however well designed in a technical economic sense, are often politically difficult to launch and, once launched, to keep afloat. Success in implementing an adjustment program may depend on a government's skill in generating political support and holding off the opposition. This article explores the politics of economic reform, drawing on country studies by political scientists and country specialists, the growing theoretical literature by economists, and the findings of a World Bank research project on the political economy of adjustment in new democracies. The article examines three broad clusters of variables: institutional characteristics of the political system, aspects of the internal economy, and the design of the reform program. It also considers the relevance of political analysis for policymakers and for international financial institutions. Copyright 1993 by Oxford University Press.

Suggested Citation

  • Haggard, Stephan & Webb, Steven B, 1993. "What Do We Know about the Political Economy of Economic Policy Reform?," The World Bank Research Observer, World Bank, vol. 8(2), pages 143-168, July.
    • Handle: RePEc:oup:wbrobs:v:8:y:1993:i:2:p:143-68
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