Do crisi instigate reforms

Abstract

This thesis investigates the relationship between crises and reforms by looking at whether reforms are more likely during crises, and whether democracies and autocracies implement reforms differently in the presence of a crisis. Empirical evidence on these relationships is still very limited. Using panel data on over 150 countries over the period of 1960-2005, this paper finds evidence that economic reforms are more likely to be adopted in democracies, and that countries converge towards a certain level of reforms. These results are robust to the inclusion of several control variables. Our results also show that the level of reforms in neighbouring countries has a positive influence on reforms. The empirical analysis shows that there is an ambiguous effect of crises. Different types of crises appear to differently affect whether reforms are implemented. This analysis differs from others in the sense that multiple dimensions of reforms are investigated for a large sample.