## Structural Reforms and Economic Performance in Advanced and Developing Countries

_Occasional Papers, October 15, 2009_

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**Canonical URL:** [Structural Reforms and Economic Performance in Advanced and Developing Countries](https://www.imf.org/en/publications/occasional-papers/issues/2016/12/31/structural-reforms-and-economic-performance-in-advanced-and-developing-countries-22594)

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## Bibliographic details
- Authors: Jonathan David Ostry, Alessandro Prati, Antonio Spilimbergo
- Published: October 15, 2009
- Series: Occasional Papers
- DOI: https://doi.org/10.5089/9781589068186.084

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### Scope and dataset
- Examines the impact on economic performance of structural policies—policies that increase the role of market forces and competition in the economy, while maintaining appropriate regulatory frameworks.
- Uses a new dataset covering reforms of:
  - domestic product markets,
  - international trade,
  - the domestic financial sector,
  - the external capital account.
- Sample covers reforms in 91 developed and developing countries.

### Key empirical findings on growth
- Real and financial reforms boost income growth, with particular emphasis on:
  - domestic financial liberalization,
  - trade liberalization,
  - agricultural liberalization.
- Growth effects differ significantly across alternative reform sequencing strategies:
  - A trade-before-capital-account strategy achieves better outcomes than the reverse, or even than a "big bang".
  - Liberalizing the domestic financial sector together with the external capital account is growth-enhancing, provided the economy is relatively open to international trade.

### Financial sector, resilience, and transmission mechanisms
- Relatively liberalized domestic financial sectors enhance the economy's resilience.
- Such liberalization reduces output costs from adverse terms-of-trade and interest-rate shocks.
- Increased credit availability is identified as one of the key mechanisms through which financial liberalization improves resilience.

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_Source: https://www.imf.org/en/publications/occasional-papers/issues/2016/12/31/structural-reforms-and-economic-performance-in-advanced-and-developing-countries-22594_