Why do countries delay stabilizations of large and increasing budget deficits and inflation? And what explains the timing of reformsW hy do certain countries implement economic reforms relatively promptly and swiftly, whereas others delay them, letting significant economic costs accumulate? This issue puzzles economists and policymakers, and it is part of an even broader question: why do certain societies follow for long periods policies that are clearly costly and unsustainable? In many ways, this is the key issue at the core of political economics. 1