New Economics Papers
on Business, Economic and Financial History
Issue of 2005‒03‒20
three papers chosen by

  1. Why Are Latin Americans so Unhappy about Reforms? By Ugo Panizza; Monica Yañez
  2. International Coercion, Emulation and Policy Diffusion: Market-Oriented Infrastructure Reforms, 1977-1999 By Witold J. Henisz; Bennet A. Zelner; Mauro F. Guillen
  3. THE ROLE AND NATURE OF MARKET SENTIMENT IN THE 1992 ERM CRISIS By Oreste Napolitano; Alberto Montagnoli; Rosaria Rita Canale

  1. By: Ugo Panizza (Research Department, Inter-American Development Bank); Monica Yañez (Research Department, Inter-American Development Bank)
    Abstract: This paper uses opinion surveys to document discontent with the pro-market reforms implemented by most Latin American countries during the 1990s. The paper also explores four possible sets of explanations for this discontent: (i) a general drift of the populace’s political views to the left; (ii) an increase in political activism by those who oppose reforms; (iii) a decline in the people’s trust of political actors; and (iv) the economic crisis. The paper’s principal finding is that the macroeconomic situation plays an important role in explaining the dissatisfaction with the reform process.
    Keywords: Political economy; Reforms; Crisis; Latin America
    JEL: P16 O54
    Date: 2004–01
  2. By: Witold J. Henisz; Bennet A. Zelner; Mauro F. Guillen
    Abstract: Why do some countries adopt market-oriented reforms such as deregulation, privatization and liberalization of competition in their infrastructure industries while others do not? Why did the pace of adoption accelerate in the 1990s? Building on neo-institutional theory in sociology, we argue that the domestic adoption of market-oriented reforms is strongly influenced by international pressures of coercion and emulation. We find robust support for these arguments with an event-history analysis of the determinants of reform in the telecommunications and electricity sectors of as many as 205 countries and territories between 1977 and 1999. Our results also suggest that the coercive effect of multilateral lending from the IMF, the World Bank or Regional Development Banks is increasing over time, a finding that is consistent with anecdotal evidence that multilateral organizations have broadened the scope of the “conditionality” terms specifying market-oriented reforms imposed on borrowing countries. We discuss the possibility that, by pressuring countries into policy reform, cross-national coercion and emulation may not produce ideal outcomes.
    Keywords: Privatization, deregulation, liberalization, infrastructure, International Monetary Fund (IMF), World Bank, Multileral Institutions, Development, Reform, Globalization, Adoption, International
    JEL: O19 F02 F42 H11 L33 L96 L94 N70 P16 C41
    Date: 2004–07–01
  3. By: Oreste Napolitano; Alberto Montagnoli; Rosaria Rita Canale
    Abstract: This paper attempts to explain the importance of the role of the speculators in determining the 1992 ERM crisis, and the effects that the policy of maintaining external parity had on internal growth. We focus on a different way through which expectations are formed about the macroeconomic fundamentals independently of the behaviour of the monetary policy. In the present model, agents’ rational beliefs do not emerge from arbitrary circumstances but only when the value of the exchange rate, kept under control by the central bank, did not correspond to the expected value and to the current wide-spread beliefs in the market.

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