## Structural Reforms to Accelerate Growth, Ease Policy Trade-offs, and Support the Green Transition in Emerging Market and Developing Economies

_Staff Discussion Notes, September 22, 2023_

## Source details

**Canonical URL:** [Structural Reforms to Accelerate Growth, Ease Policy Trade-offs, and Support the Green Transition in Emerging Market and Developing Economies](https://www.imf.org/en/publications/staff-discussion-notes/issues/2023/09/21/structural-reforms-to-accelerate-growth-ease-policy-trade-offs-and-support-the-green-538429)

## Other formats

- [Markdown version](/en/publications/staff-discussion-notes/issues/2023/09/21/structural-reforms-to-accelerate-growth-ease-policy-trade-offs-and-support-the-green-538429/index.md)
- [Structured JSON version](/en/publications/staff-discussion-notes/issues/2023/09/21/structural-reforms-to-accelerate-growth-ease-policy-trade-offs-and-support-the-green-538429/index.json)
- [Bundle manifest](/en/publications/staff-discussion-notes/issues/2023/09/21/structural-reforms-to-accelerate-growth-ease-policy-trade-offs-and-support-the-green-538429/bundle-manifest.json)

## Bibliographic details
- Authors: Nina Budina, Christian H Ebeke, Florence Jaumotte, Andrea Medici, Marina Mendes Tavares, Bella Yao
- Published: September 22, 2023
- Series: Staff Discussion Notes
- DOI: https://doi.org/10.5089/9798400250095.006

---

### Context and key challenges
- Emerging market and developing economies face: economic scarring, social tension, and reduced policy space in the aftermath of the COVID-19 pandemic.
- High public debt and persistently high inflation have constrained policy space and created difficult policy trade-offs.
- Policy actions are urgently needed to boost growth in the near term and to support the ongoing green transition.

### Framework for prioritization, packaging, and sequencing of macrostructural reforms
- Prioritize removal of the most binding constraints on economic activity to front-load reform gains.
- Bundle complementary reforms to amplify impact, specifically:
  - Governance reforms
  - Business deregulation
  - External sector reforms
- Sequence other reforms appropriately to sustain gains, including:
  - Labor market reforms
  - Credit sector reforms

### Estimated impacts of a major reform package
- In emerging market and developing economies with large initial structural gaps, the estimated output effects of a major reform package are:
  - about 4 percent in two years
  - and 8 percent in four years

### Green transition implications
- Achieving higher growth and lower absolute carbon emissions over time requires a well-designed strategy that includes both:
  - macrostructural reforms
  - and green reforms

### Policy recommendations (implied by the analysis)
- Front-load reforms by removing the most binding constraints on activity.
- Bundle governance, business deregulation, and external sector reforms to deliver larger, faster output gains.
- Sequence labor market and credit sector reforms to consolidate and sustain improvements.
- Integrate macrostructural reform strategies with green policies to simultaneously raise growth and reduce absolute carbon emissions.

*Source: Nina Budina; Christian H Ebeke; Florence Jaumotte; Andrea Medici; Augustus J Panton; Marina Mendes Tavares; Bella Yao — Staff Discussion Note, September 22, 2023.*

---

## Content in this bundle

- **Staff Discussion Note**
  - [Staff Discussion Note (Markdown version)](/-/media/files/publications/sdn/2023/english/sdnea2023007.pdf.md){rel="alternate" type="text/markdown"}
  - [Staff Discussion Note (PDF)](/-/media/files/publications/sdn/2023/english/sdnea2023007.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/staff-discussion-notes/issues/2023/09/21/structural-reforms-to-accelerate-growth-ease-policy-trade-offs-and-support-the-green-538429_