Structural Reforms to Lift Growth: Lao People's Democratic Republic
Selected Issues Papers, March 18, 2026
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- Structural Reforms to Lift Growth: Lao People's Democratic Republic
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Bibliographic details
- Authors: Weining Xin, Liangliang Zhu
- Published: March 18, 2026
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9781513569482.018
Context and objective
- Background: Improved macroeconomic stability in Lao People’s Democratic Republic (Lao PDR) and the ambition to achieve upper-middle-income (UMI) status by 2035.
- Objective: Examine the impact of structural reforms on Lao PDR’s growth outcomes and quantify potential growth gains from closing structural gaps with upper middle-income countries (UMICs).
Key findings on structural gaps
- Major gaps relative to UMICs are concentrated in:
- Governance
- Business regulations
- Labor market
- Human development
- Interpretation: These gaps imply substantial scope for structural reforms to raise potential growth by catching up with aspirational peers.
Cross-country evidence on reform impacts
- Structural reforms produce significant output boosts over time.
- Impact characteristics:
- Persistent positive impact
- Cumulation over time, delivering larger gains in the medium term
Policy implications and recommended reform areas
- Priority reform directions to close gaps with UMICs:
- Strengthen governance
- Improve the business environment
- Promote human development
- Expected outcome: Implementing ambitious reforms in these areas would deliver large growth gains, especially over the medium term, and support attainment of Lao PDR’s development goal in a sustainable manner.
Structural Reforms to Lift Growth: Lao People's Democratic Republic, Selected Issues Paper No. 2026/023 (March 18, 2026).
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- Structural Reforms to Lift Growth: Lao People's Democratic Republic