## Growth and Structural Reforms: A New Assessment

_IMF Working Papers, December 1, 2009_

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## Bibliographic details
- Authors: Lone Engbo Christiansen, Thierry Tressel, Martin Schindler
- Published: December 1, 2009
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451874297.001

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### Core findings
- The paper assesses the relationship between economic performance and three groups of economic reforms: domestic finance, trade, and the capital account.
- Domestic financial reforms and trade reforms are robustly associated with economic growth, but only in middle-income countries.
- No systematic positive relationship is found between capital account liberalization and economic growth.
- The effect of domestic financial reforms on economic growth in middle-income countries is explained by improvements in measured aggregate TFP growth, not by higher aggregate investment.
- Variation in the quality of property rights helps explain heterogeneity in the effectiveness of financial and trade reforms in developing countries.
- Evidence suggests that sufficiently developed property rights are a precondition for reaping the benefits of economic reform.
- Results are robust to endogeneity bias and a number of alternative specifications.

### Data, methods, and scope
- Simultaneous assessment across three reform groups: domestic finance, trade, and the capital account.
- Focus on heterogeneity across country income groups, with key positive associations identified for middle-income countries only.
- Outcomes analyzed include economic growth and measured aggregate total factor productivity (TFP) growth; aggregate investment is explicitly examined and not found to explain the financial-reform growth link in middle-income countries.

### Policy-relevant implications
- Prioritize domestic financial and trade reforms in middle-income countries to support growth, conditional on institutional context.
- Strengthen property rights as a complementary precondition to ensure reforms translate into growth and TFP gains.
- Caution against expecting growth dividends solely from capital account liberalization based on the paper’s findings.

### Publication and metadata
- Authors: Lone Engbo Christiansen, Thierry Tressel, Martin Schindler
- Date: December 1, 2009
- Series: Working Paper No. 2009/284
- Issue: 284
- Volume: 2009
- Pages: 52
- DOI: https://doi.org/10.5089/9781451874297.001
- Stock No: WPIEA2009284
- ISBN: 9781451874297
- ISSN: 1018-5941
- Subjects: Capital account, Capital account liberalization, Inflation, Personal income, Total factor productivity
- Keywords: capital account reform, dependent variable, liberalization index, WP

*IMF Working Paper "Growth and Structural Reforms: A New Assessment" by Lone Engbo Christiansen, Thierry Tressel, and Martin Schindler (Working Paper No. 2009/284, December 1, 2009).*

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/growth-and-structural-reforms-a-new-assessment-23464_