Political Feasibility and Investment in Economic Transformations

Author/Editor:

Peter Isard ; Joshua Aizenman

Publication Date:

July 1, 1993

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The paper characterizes the feasibility of economic transformation as requiring the simultaneous attainment of macroeconomic stability, political support, and adequate private investment. Macroeconomic stability is defined as fiscal balance; political feasibility is related to the income gains and losses of different population groups; and private investment is linked to public “infrastructure” investment. The analysis illustrates that attainment of the multiple requirements for successful transformation may necessitate a “big push” with external financial and technical assistance. It also emphasizes the importance of the productivity gains achieved when workers are induced to make occupational choices consistent with their comparative advantages.

Series:

Working Paper No. 93/57

Subject:

English

Publication Date:

July 1, 1993

ISBN/ISSN:

9781451967289/1018-5941

Stock No:

WPIEA0571993

Format:

Paper

Pages:

32

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