- Antonio Spilimbergo, Alessandro Prati, and Jonathan Ostry
- Published Date:
- October 2009
© 2009 International Monetary Fund
Production: IMF Multimedia Services Division
Figures: Theodore F. Peters, Jr. and Tom Wood
Typesetting: Alicia Etchebarne-Bourdin
Ostry, Jonathan D., 1962–
Structural reforms and economic performance in advanced and developing countries / Jonathan D. Ostry, Alessandro Prati, and Antonio Spilimbergo— Washington, D.C.: International Monetary Fund, 2009.
p.; cm.—(Occasional paper (International Monetary Fund); no. 268).
Incudes bibliographical references.
1. Structural adjustment (Economic policy)—Developed countries. 2. Structural adjustment (Economic policy)—Developing countries. I. Prati, Alessandro, 1961–. II. Spilimbergo, Antonio. III. International Monetary Fund. IV. Title. V. Series: Occasional Paper (International Monetary Fund); no. 268.
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The following conventions are used in this publication:
In tables, a blank cell indicates “not applicable,” ellipsis points (…) indicate “not available,” and 0 or 0.0 indicates “zero” or “negligible.” Minor discrepancies between sums of constituent figures and totals are due to rounding.
An en dash (-) between years or months (for example, 2007-08 or January-June) indicates the years or months covered, including the beginning and ending years or months; a slash or virgule (/) between years or months (for example, 2007/08) indicates a fiscal or financial year, as does the abbreviation FY (for example, FY2008).
“Billion” means a thousand million; “trillion” means a thousand billion.
“Basis points”refer to hundredths of 1 percentage point (for example, 25 basis points are equivalent to ¼ of 1 percentage point).
As used in this publication, the term “country” does not in all cases refer to a territorial entity that is a state as understood by international law and practice. As used here, the term also covers some territorial entities that are not states but for which statistical data are maintained on a separate and independent basis.
This paper examines the impact on economic performance of structural policies—that is, policies that increase the role of market forces and competition in the economy, while maintaining appropriate regulatory frameworks. It examines the effects of structural reforms on two aspects of economic performance—medium-run growth and macroeconomic stability and resilience—from a global standpoint, and in so doing improves the analytical basis of IMF policy advice by drawing on the lessons from broad cross-country experience. Underpinning the results was a major data collection effort, involving the compilation of indicators of structural reform for a large sample of 91 developing and developed countries over the past three decades. The resulting dataset is unique in its country and time coverage. Compared to most previous efforts, it is also much broader in terms of the sectoral coverage of reforms—including indicators of liberalization in domestic product markets, international trade, several indicators of liberalization of the domestic financial sector, and measures of external capital account liberalization. The dataset's breadth along the sectoral dimension is essential to address issues of reform sequencing, an area that has generated much thought from a theoretical standpoint, but where systematic cross-country evidence—as opposed to smaller-scale case studies—is sorely lacking.
The paper was prepared under the direction of Jonathan D. Ostry (Deputy Director, Research Department) by a staff team led by Alessandro Prati (Chief, Macroeconomic Studies Division in the Research Department) and Antonio Spilimbergo, and comprising Lone Christiansen, Prachi Mishra, Chris Papageorgiou, Rodney Ramcharan, Martin Schindler, Nikola Spatafora, Stephen Tokarick, and Thierry Tressel. The paper has benefited from comments from a number of IMF colleagues. Special thanks are due to Manzoor Gill and Freddy Cama for outstanding research support, and to Tracey Lookadoo whose help ensured the timely preparation of the manuscript. Esha Ray of the External Relations Department edited the manuscript and coordinated its publication. The opinions expressed in this paper are those of the authors and do not necessarily represent the views of national authorities, the IMF, or IMF Executive Directors.
This paper is dedicated to the memory of Alessandro Prati.