The Politics of Economic Policy Reform in Developing Countries

Adams, Richard H., Jr.

World Bank, Washington, DC

关键词: BUDGET DEFICITS;    CONSUMER SUBSIDIES;    DEVALUATION;    DEVELOPING COUNTRIES;    DEVELOPING COUNTRY;   

DOI  :  10.1596/1813-9450-2443
RP-ID  :  WPS2443

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Because of politics, some economicpolicy reforms are adopted and pursued in the developingworld, and others are delayed, and resisted. Economic reformis inherently a political act: It changes the distributionof benefits in society, benefiting some social groups, andhurting others. Social groups may oppose reform because ofdoubts about its benefits, or because they know it will harmtheir economic interests. The author shows how three typesof reform - currency devaluation, the privatization of stateenterprises, and the elimination of consumer (food)subsidies - affect the utility of nine different socialgroups (including international financial institutions).When governments try to privatize state-owned enterprises,for example, more social groups with greater politicalweight are likely to be disadvantaged than helped. Urbanworkers, urban bureaucrats, urban students, and the urbanpoor, are likely to "lose out" and will stronglyoppose privatization. But the ruling elite, and urbanpoliticians are also likely to at least partly resistprivatization, fearing that such reform will reduce theireconomic "rents". More social groups, and powerpoints thus oppose privatization than favor it, so thispolicy reform is likely to be delayed, or not implemented atall. However, social groups do not possess an absolute vetoover economic reform, and policy reform can (and often does)occur, despite the opposition of certain social groups. Itdepends on the aggregate political weight of the groupsopposing reform. For example, as the author shows, fivesocial groups, either wholly or partly, oppose eliminatingconsumer (food) subsidies, but the combined weight of thosegroups is only roughly equal to the political weight of thefour social groups - international financial institutions,the ruling elite, urban politicians, and urban capitalists -that favor this reform. Politically, consumer subsidies canbe eliminated, or reduced, if the right kind of concern isshown for opposing social groups.