Front Matter

Front Matter Page

STRUCTURAL REFORMS AND MACROECONOMIC PERFORMANCE: COUNTRY CASES

November 2015

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  • The Staff Report prepared by IMF staff and completed on October 13, 2015

The report prepared by IMF staff has benefited from comments and suggestions by Executive Directors following the informal session on October 28, 2015. Such informal sessions are used to brief Executive Directors on policy issues and to receive feedback from them in preparation for a formal consideration at a future date. No decisions are taken at these informal sessions. The views expressed in this paper are those of the IMF staff and do not necessarily represent the views of the IMF's Executive Board.

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  • Structural Reforms and Macroeconomic Performance: Initial Considerations for the Fund.

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Front Matter Page

STRUCTURAL REFORMS AND MACROECONOMIC PERFORMANCE: COUNTRY CASES

October 13, 2015

Executive Summary

As a companion piece to the Board paper on Structural Reforms and Macroeconomic Performance: Initial Considerations for the Fund, this paper presents a selection of case studies on the structural reform experiences of member countries. These papers update the Board on work since the Triennial Surveillance Review toward strengthening the Fund’s capacity to analyze and, where relevant, offer policy advice on macro-relevant structural issues. The paper builds on the already considerable analytical work underway across the Fund, setting out considerations to support a more strategic approach going forward.

Countries’ reform experiences offer invaluable insights to help inform a more well-rounded approach to enhancing the Fund’s work on structural reform. In this context, the Fund is working to better leverage its country-based analysis and to share knowledge of cross-country reform experiences. For this paper, we examine six country cases: Armenia, Australia, Malaysia, Peru, Tanzania and Turkey. The cases cover a range of reform issues and experiences, with some focusing on longer-term reform efforts as part of a broader structural transformation and others focus on more concentrated reform episodes.

The experiences of these countries tend resonate with historical reform patterns and the analysis in the main paper, suggesting that sustained reforms typically coincide with periods of improved productivity and macroeconomic performance more generally. Moreover, these experiences hint at potential lessons for designing and implementing effective reforms, including the importance of strong ownership, the ability to sustain reforms, and the need for complementary macroeconomic and structural policies.

Approved By

Siddharth Tiwari

Prepared by Strategy, Policy, and Review Department, in consultation with area departments.

Contents

  • CONTRIBUTORS

  • LIST OF ABBREVIATIONS

  • ARMENIA

  • AUSTRALIA

  • MALAYSIA

  • PERU

  • TANZANIA

  • TURKEY

  • FIGURES

  • 1. Armenia and Comparator Growth Rates

  • 2. Armenia: Production and Investment

  • 3. Armenia: Structural Reform Waves & Total Factor Productivity

  • 4. Australia: Labor Productivity and Real Wages

  • 5. Australia: Structural Reform Waves & Total Factor Productivity

  • 6. Malaysia: Trade and Capital Account Openness

  • 7. Malaysia: Banking and Capital Market Reform

  • 8. Malaysia: Structural Reform Waves & Total Factor Productivity

  • 9. Peru: Total Structural Reform Index

  • 10. Peru: Structural Reform Waves & Total Factor Productivity

  • 11. Tanzania: Structural Reform Waves & Macroeconomic Stabilization

  • 12. Turkey: Potential Output Growth Decomposition

  • 13. Turkey: Structural Reform Waves & Total Factor Productivity

Contributors

Prepared by SPR’s Macrostructural team, comprising Swarnali Ahmed, Freddy Rojas Cama, Irineu de Carvalho Filho, M. Astou Diouf, Christian Gonzales, Minsuk Kim, Annette Kyobe, Karen Ongley (co-lead), Michael Perks, Chris Papageorgiou (co-lead), Hajime Takizawa, Evridiki Tsounta, Xin Cindy Xu. Sanjaya Panth and Taline Koranchelian provided general guidance.

Country cases prepared by SPR, in consultation with Area Departments:

  • Armenia—Evridiki Tsounta (SPR), in consultation with MCD

  • Australia—Adil Mohommad (APD) and Hajime Takizawa (SPR)

  • Malaysia—Xin Cindy Xu (SPR), in consultation with APD (Alexandros Mourmouras)

  • Peru—Michael Perks (SPR), in consultation with WHD (Kevin Ross, now MCD)

  • Tanzania— Nikoloz Gigineishvili (AFR) and Annette Kyobe (SPR)

  • Turkey—Irineu de Carvalho Filho (SPR), in consultation with EUR

List of Abbreviations

AMs

Advanced Market economies

AML/CFT

Anti-Money Laundering/Combating the Financing of Terrorism

DSGE

Dynamic stochastic general equilibrium

EMs

Emerging Market economies

EMDCs

Emerging Market and Developing Countries

GPA

Global Policy Agenda

ILO

International Labor Organization

IMF

International Monetary Fund

LICs

Low-Income Countries

LIDCs

Low-Income Developing Countries

OECD

Organization for Economic Cooperation and Development

NPL

Non-Performing Loans

QE

Quantitative Easing

R&D

Research and Development

REER

Real Effective Exchange Rate

REO

Regional Economic Outlook

TFP

Total Factor Productivity

TSR

Triennial Surveillance Review

ULC

Unit Labor Cost

UMP

Unconventional Monetary Policy

WEO

World Economic Outlook

ZLB

Zero Lower Bound

Structural Reforms and Macroeconomic Performance - Country Cases
Author: International Monetary Fund