Front Matter Page

Western Hemisphere Department

Contents

  • I. Introduction

  • II. Structural Reform Efforts in LAC Since the 1970s

  • III. Quantifying the Effects of Structural Reforms

    • A. The Effects on Economic Growth, Employment, and Total Factor Productivity

    • B. Do initial conditions matter?

    • C. Inspecting the Mechanisms: Investment, FDI, Informality, and Confidence

    • D. Structural Reforms and External Trade

    • E. The Sectoral Effects of Reforms

    • F. Collateral Damage? The Effects of Reforms on Poverty and Inequality

  • IV. Country Case Studies Using the Synthetic Control Method

  • V. Policy Implications and Conclusions

  • Figures

    • Figure 1. Trends in the Structural Reforms Index

    • Figure 2. Ratios Relative to the United States for Different Reform Areas (Selected Countries)

    • Figure 3. Overall Support for Reforms

    • Figure 4. Support for Specific Reforms

    • Figure 5. Effects of Structural Reforms on Real GDP

    • Figure 6. Effects of Structural Reforms on Employment

    • Figure 7. Effects of Structural Reforms on Total Factor Productivity

    • Figure 8. Effects of Structural Reforms on GDP Depending on the State of the Economy

    • Figure 9. Effects of Domestic Finance Reforms on GDP Conditioned on the Level of Liberalization

    • Figure 10. Effects of Trade and Product Market Reforms on GDP Conditioned on the Level of Labor Market Liberalization

    • Figure 11. Effects of Structural Reforms on Investment and FDI

    • Figure 12. Effects of Structural Reforms on Informality Rate

    • Figure 13. Effects of Structural Reforms on Business Confidence (14 Economies)

    • Figure 14. Effects of Structural Reforms on Real Exports

    • Figure 15. Effects of Structural Reforms on Real Imports

    • Figure 16. Effects of Structural Reforms on Export concentration (Theil index)

    • Figure 17. Effects of Structural Reforms on Agriculture and Manufacturing Value Added

    • Figure 18. Effects of Structural Reforms on Services Value Added

    • Figure 19. Effects of Structural Reforms on Manufacturing Value Added

    • Figure 20. Effects of Structural Reforms on Agriculture Value Added

    • Figure 21. Effects of Structural Reforms on Services Value Added

    • Figure 22. Effects of Structural Reforms on Poverty and Inequality

    • Figure 23. Chile: Synthetic Control and Placebo

    • Figure 24. Colombia: Synthetic Control and Placebo

    • Figure 25. Mexico: Synthetic Control and Placebo

  • Tables

    • Table 1. Fixed-Effects Panel Regressions of the Drivers of Reforms

  • Appendixes

    • VI. Annex A: Definitions and Sources for Selected Variables

    • Annex B: Additional Regressions on Determinants of Reforms

The Macroeconomic Effects of Structural Reforms in Latin America and the Caribbean
Author: Mr. Antonio David, Mr. Takuji Komatsuzaki, and Samuel Pienknagura