MACMILLAN Understanding Market Reforms: Volume 2: Motivation, Implementation and Sustainability

During the last 25 years there has been a widespread move toward more market-oriented policies and institutions across the developing and former socialist countries, usually in the context of more politically open societies. The most remarkable fact of this movement is that while policies have often been quite similar, results have been very different. Thirty-one country studies, relying heavily on a political economy analysis, were undertaken to try to understand these divergent results. In this book the findings of these studies are synthesized on a regional and global basis. The syntheses show that even when reforms follow 'Washington Consensus' type recommendations quite closely, on entering the arena of political economy, they are often greatly transformed or diluted. In short, the country can be caught in a political economy trap in which the prime motivation behind the reforms is to strengthen the benefits to specific, usually elite groups. Some strong impetus, often external, is needed to break out of this trap. Even a reform that appears successful can be unsustainable, if it is perceived as illegitimate or undertaken in the context of a polity that is unable to strengthen cooperation, because it may result in popular resistance, changes in governments, the lack of collective learning ability, or simply reform fatigue. About the Author JOSE M. FANELLI is currently Senior Researcher at CEDES, Argentina. He specializes in the analysis of macroeconomic and financial problems in developing countries and has published a large number of academic articles and several books on these topics. He has been actively involved in the establishment of permanent research networks in the Latin American region. GARY MCMAHON is Principal Economist with the Global Development Network. He was on secondment to the World Bank from 2004-2006, where he worked from 1996-2001 on social and environmental sustainability and research capacity building. He has numerous publications in development economics and has edited 8 books on development and transition economies. He has a PhD in Economics from the University of Western Ontario.