Support for Economic Reforms Hinges on Communication, Engagement, and Trust
IMF Blog, October 16, 2024
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Bibliographic details
- Authors: Silvia Albrizio, Bertrand Gruss, Yu Shi
- Published: October 16, 2024
Overview
- Authors: Silvia Albrizio, Bertrand Gruss, Yu Shi
- Date: October 16, 2024
- Core message: Effective communication, civic engagement, and earning the public's trust are the keys to advance pro-growth reforms. The analysis draws on new work highlighted in Chapter 3 of the October 2024 World Economic Outlook, “Understanding the Social Acceptability of Structural Reforms.”
Context: why reforms are urgent
- The global economy is stuck in a low-growth gear due to aging populations, weak business investment, and structural frictions that prevent capital and labor from flowing to where they can be most productive.
- Demographic pressures and the green and digital transitions require significant investment and resource reallocation across companies and industries.
- Many countries share needs to:
- ease market entry for new businesses,
- foster competition in the provision of goods and services,
- encourage workers to stay in the labor force,
- better integrate immigrant workers.
Understanding social resistance
- Survey scope: more than 12,000 people across six representative countries.
- Key finding on determinants:
- Personal beliefs, perceptions and other behavioral factors account for about 80 percent of support for reforms.
- Knowledge and misperceptions about the need for reform and the effects of policies are the primary predictors of differences in policy support.
- Perceptions of distribution and fairness matter: opponents often worry about impacts on their communities and the most vulnerable, not only on themselves (example: fears that increased private sector roles in electricity and telecommunications would make services less affordable and reduce access for the poorest).
- Lack of trust fuels opposition: many who oppose reforms cite general distrust of the parties involved and doubts about the government’s ability to implement changes and mitigate harms.
Strategies and tools to boost support
- Overarching approach: a multi-faceted strategy combining Information, Engagement, Mitigation, and Trust.
- Information
- Effective communication goes beyond advertising reforms: policymakers must convincingly explain the need for change, the expected effects, and how they might be achieved.
- Providing clear and nonpartisan information that corrects misperceptions significantly increases public support.
- Evidence: information led to more than 40 percent of those who were opposed to migrant integration policies in our survey to change their mind.
- Engagement
- Dialogue should be two-way: allowing people to help shape policies and voice concerns fosters community ownership and increases likelihood of support.
- Mitigation
- Acknowledge reforms may hurt some groups and address concerns with tailored mitigating measures.
- Mitigations (e.g., temporary cash support, training programs) should be informed by two-way dialogues between officials and citizens.
- Trust
- Trust underpins the other pillars: effective communication requires confidence in both the message and the messenger.
- Engagement should start early, in the policy design stage.
- Reform design mechanisms should reassure the public that the government will deliver on mitigating commitments when reforms are done.
- Establishing credible and independent government bodies to conduct and validate policy analysis can help.
- First-generation reforms to address corruption and improve governance are fundamental to restoring faith in institutions.
- Practical tools to implement the strategy
- Public forums, pilot programs, and opinion surveys to inform two-way dialogue.
- Large-scale surveys, focus groups, and participatory tools to identify concerns, craft mitigations, and build consensus.
- New civic technologies, such as digital community engagement platforms, to broaden citizen participation.
Policy implications and institutional application
- Effective reform design requires thorough consultation, communication, and mitigation to compensate those who might be hurt.
- Better tools to encourage participation will help people understand proposals and build the public trust needed to carry out vital economic reforms.
- These principles should be reflected in the IMF’s periodic reviews of its program, surveillance, and capacity development initiatives.
Source: Silvia Albrizio, Bertrand Gruss, Yu Shi, “Support for Economic Reforms Hinges on Communication, Engagement, and Trust,” October 16, 2024; based on Chapter 3 of the October 2024 World Economic Outlook, “Understanding the Social Acceptability of Structural Reforms.”