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Can Reform Waves Turn the Tide? Some Case Studies Using the Synthetic Control Method
Author: Bibek Adhikari, Mr. Romain A Duvalhttps://orcid.org/0000-0002-2775-7172, Bingjie Hu, and Mr. Prakash Loungani
Series:
IMF Working Papers
Volume/Issue:
Volume 2016: Issue 171
Language:
English
Publication Date:
09 Aug 2016
DOI:
https://doi.org/10.5089/9781475524277.001
ISBN:
9781475524277
ISSN:
1018-5941
Pages:
35
Keywords:
WP; labor market; real GDP; product market; fiscal policy; structural reforms; synthetic control method; liberalization; labor and productivity market reforms; growth; heads of state government; State life insurance insurance company; industrial relations; government's share; predictive power; reform package; donor country; untreated country; income support; firm level; life insurance insurance company; Labor market reforms; Competition; Active labor market policies; Unemployment; Europe; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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A number of advanced economies carried out a sequence of extensive reforms of their labor and product markets in the 1990s and early 2000s. Using the Synthetic Control Method (SCM), this paper implements six case studies of well-known waves of reforms, those of New Zealand, Australia, Denmark, Ireland and Netherlands in the 1990s, and the labor market reforms in Germany in the early 2000s. In four of the six cases, GDP per capita was higher than in the control group as a result of the reforms. No difference between the treated country and its synthetic counterpart could be found in the cases of Denmark and New Zealand, which in the latter case may have partly reflected the implementation of reforms under particularly weak macroeconomic conditions. Overall, also factoring in the limitations of the SCM in this context, the results are suggestive of a positive but heterogenous effect of reform waves on GDP per capita.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund