Redistributive Promises and the Adoption of Economic Reform

Walk the line: Conflict, state capacity and the political dynamics of reform

“…In addition, among the 1 − e α proportion of initial losers, a such a reallocation. For a fuller discussion, see Jain and Mukand (2003) and Fernandez and Rodrik (1991). 4 This could be, for example, the cost of reorienting the bureaucratic and administrative set-up to channel government expenditure towards sector M instead of the traditional sector A.…”

“…At each stage, based on the outcome of the reform so far, the government in power has the option to discontinue any further reform. Governments also have the ability to tax winners to compensate losers (as in Jain and Mukand, 2003). The most crucial element of our framework is that we endogenize both the government's decision on the continuation of reforms and on redistribution, through a political equilibrium involving the winners and losers at each stage.…”

“…Other channels that may inhibit or delay reform have been investigated by several papers (e.g. Rubinchik and Wang (2008), Jain and Mukand (2003)). Acemoglu and Robinson (2000) illustrate how elites may block economic or institutional reform if it may erode their political power.…”

Majority voting leads to unanimity

“…For example, in political-economy models of economic reform it is often assumed that, if there is compensation, then all losers are compensated (see, e.g., Dewatripont and Roland, 1997;Claussen, 2002;Jain and Mukand, 2003). Although there is -as already mentioned -empirical support for wide compensation, 5 such an assumption may seem theoretically inconsistent with the modeling that such papers are based on.…”

Social Preferences and Voting on Reform - An Experimental Study

“…For further discussion and examples of the role of uncertainty in the political economy of a reform, see Rodrik (1996) and Tommasi and Velasco (1995). A formal model of uncertainty and the adoption of economic reform was developed by Jain and Mukand (2003). Related time inconsistency problems were discussed by Dixit and Londregan (1996).…”