{
  "title": "Fiscal Reforms, Long-term Growth and Income Inequality",
  "publication": "IMF Working Papers, June 29, 2017",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2017/06/29/fiscal-reforms-long-term-growth-and-income-inequality-44967",
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  "summary": "We estimate the effects on growth of nine fiscal reform episodes in seven high-income countries using the Synthetic Control Method. These episodes are selected using an indicator-based approach applied to the evaluation of growth-friendly fiscal reforms during 1975-2010.",
  "sections": [
    {
      "heading": "Summary of findings",
      "content": "- Estimated effects on growth of nine fiscal reform episodes in seven high-income countries using the Synthetic Control Method.\n- Episodes selected via an indicator-based approach evaluating growth-friendly fiscal reforms during 1975-2010.\n- In reform countries the annual growth rate of real GDP was on average about 1 percentage point above their synthetic units 10 years after each respective reform.\n- Countries which were initially less developed seemed to experience a larger growth impact after their reforms.\n- Results are broadly robust to controlling for structural reforms on business regulation, financial market, labor market, and legal and product markets.\n- Findings suggest that inequality is not affected by the growth-friendly fiscal reforms analyzed in this paper."
    },
    {
      "heading": "Methodology",
      "content": "- Approach: Synthetic Control Method (SCM).\n- Sample: Nine fiscal reform episodes in seven high-income countries.\n- Selection period for reforms: 1975-2010.\n- Controls included: structural reforms on business regulation, financial market, labor market, and legal and product markets."
    },
    {
      "heading": "Key statistics and publication metadata",
      "content": "- Number of reform episodes analyzed: nine\n- Number of countries analyzed: seven\n- Reform evaluation period: 1975-2010\n- Growth impact observed: about 1 percentage point (annual growth rate of real GDP) higher than synthetic units\n- Horizon for the reported growth impact: 10 years after each reform\n- Pages: 46\n- Volume: 2017\n- Issue: 145\n- Series: Working Paper No. 2017/145\n- DOI: https://doi.org/10.5089/9781484303689.001\n- ISBN: 9781484303689\n- ISSN: 1018-5941\n- Authors: Santiago Acosta Ormaechea, Takuji Komatsuzaki, Carolina Correa-Caro\n- Publication date: June 29, 2017"
    },
    {
      "heading": "Robustness and caveats",
      "content": "- Results remain broadly robust after controlling for a set of structural reforms that may also affect growth.\n- The paper focuses on growth-friendly fiscal reforms as identified by the indicator-based selection; external validity beyond analyzed episodes is not asserted in the summary.\n- Inequality measures examined (e.g., Gini coefficient referenced in keywords) showed no effect from the analyzed fiscal reforms."
    },
    {
      "heading": "Policy-relevant implications",
      "content": "- Growth-friendly fiscal reforms can be associated with persistent gains in real GDP growth up to at least 10 years post-reform.\n- Larger growth payoffs may accrue to countries that are initially less developed.\n- Policymakers considering fiscal reforms can factor in potential long-term growth benefits without clear adverse effects on observed inequality for the reforms studied.\n- Assessment of fiscal reform impact should account for concurrent structural reforms (business, financial, labor, legal, product markets) to isolate fiscal effects.\n\nFiscal Reforms, Long-term Growth and Income Inequality — Santiago Acosta Ormaechea, Takuji Komatsuzaki, Carolina Correa-Caro; IMF Working Paper No. 2017/145; June 29, 2017.\n\n---\n\n Content in this bundle\n\n- Fiscal Reforms, Long-term Growth and Income Inequality, WP/17/145, June 2017\n  - Fiscal Reforms, Long-term Growth and Income Inequality, WP/17/145, June 2017 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Fiscal Reforms, Long-term Growth and Income Inequality, WP/17/145, June 2017 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2017/06/29/fiscal-reforms-long-term-growth-and-income-inequality-44967"
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    "Authors: Santiago Acosta Ormaechea, Takuji Komatsuzaki, Carolina Correa-Caro",
    "Published: June 29, 2017",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781484303689.001",
    "Estimated effects on growth of nine fiscal reform episodes in seven high-income countries using the Synthetic Control Method.",
    "Episodes selected via an indicator-based approach evaluating growth-friendly fiscal reforms during 1975-2010.",
    "In reform countries the annual growth rate of real GDP was on average about 1 percentage point above their synthetic units 10 years after each respective reform.",
    "Countries which were initially less developed seemed to experience a larger growth impact after their reforms.",
    "Results are broadly robust to controlling for structural reforms on business regulation, financial market, labor market, and legal and product markets.",
    "Findings suggest that inequality is not affected by the growth-friendly fiscal reforms analyzed in this paper.",
    "Approach: Synthetic Control Method (SCM).",
    "Sample: Nine fiscal reform episodes in seven high-income countries.",
    "Selection period for reforms: 1975-2010.",
    "Controls included: structural reforms on business regulation, financial market, labor market, and legal and product markets.",
    "Number of reform episodes analyzed: nine",
    "Number of countries analyzed: seven",
    "Reform evaluation period: 1975-2010",
    "Growth impact observed: about 1 percentage point (annual growth rate of real GDP) higher than synthetic units",
    "Horizon for the reported growth impact: 10 years after each reform",
    "Pages: 46",
    "Volume: 2017",
    "Issue: 145",
    "Series: Working Paper No. 2017/145",
    "DOI: https://doi.org/10.5089/9781484303689.001",
    "ISBN: 9781484303689",
    "ISSN: 1018-5941",
    "Authors: Santiago Acosta Ormaechea, Takuji Komatsuzaki, Carolina Correa-Caro",
    "Publication date: June 29, 2017",
    "Results remain broadly robust after controlling for a set of structural reforms that may also affect growth.",
    "The paper focuses on growth-friendly fiscal reforms as identified by the indicator-based selection; external validity beyond analyzed episodes is not asserted in the summary.",
    "Inequality measures examined (e.g., Gini coefficient referenced in keywords) showed no effect from the analyzed fiscal reforms.",
    "Growth-friendly fiscal reforms can be associated with persistent gains in real GDP growth up to at least 10 years post-reform.",
    "Larger growth payoffs may accrue to countries that are initially less developed.",
    "Policymakers considering fiscal reforms can factor in potential long-term growth benefits without clear adverse effects on observed inequality for the reforms studied.",
    "Assessment of fiscal reform impact should account for concurrent structural reforms (business, financial, labor, legal, product markets) to isolate fiscal effects.",
    "**Fiscal Reforms, Long-term Growth and Income Inequality, WP/17/145, June 2017**"
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