Promises, Promises: Credible Policy Reform via Signaling / Dani Rodrik.

Format:

Book

Author/Creator:

Rodrik, Dani.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w2600.

NBER working paper series no. w2600

Language:

English

Subjects (All):

Economic policy--Econometric models.

Economic policy.

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Promises, Promises

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1988.

Cambridge, Mass. : National Bureau of Economic Research, 1988.

Summary:

Empirical experience and theory both suggest that policy reforms can be aborted or reversed if they lack sufficient credibility, One reason for such credibility problems is the legitimate doubt regarding how serious the government really is about :he reform process. This paper considers a framework in which the private sector is unable to distinguish between a genuinely reformist government and its nemesis, a government which simply feigns interest in reform because it is a precondition for foreign assistance The general conclusion is that the rate at which reforms are introduced may serve to convey the government's future intentions, and hence act as a signal of its "type". More specifically, credible policy reform may require going overboard: the government will have to go much farther than it would have chosen to in the absence of the credibility problem.

Notes:

Print version record

May 1988.

Includes bibliographical references.