Learning Dynamics and Support for Economic Reforms : Why Good News Can Be Bad

Support for economic reforms has often shown puzzling dynamics: many reforms that began successfully lost public support. We show that learning dynamics can rationalize this paradox because the process of revealing reform outcomes is an example of sampling without replacement. We show that this co...

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Bibliographic Details
Main Authors:	van Wijnbergen, Sweder J.G., Willems, Tim
Format:	Journal Article
Language:	en_US
Published:	Published by Oxford University Press on behalf of the World Bank 2017
Subjects:	ECONOMIC REFORM SPECIAL ECONOMIC ZONES INCOME DISTRIBUTION LEARNING RATIONAL ACTORS PRICE CONTROLS SUBSIDIES PRIVATIZATION TRADE BARRIERS SPATIAL ANALYSIS
Online Access:	http://hdl.handle.net/10986/27690

id	okr-10986-27690
recordtype	oai_dc
spelling	okr-10986-276902021-05-25T10:54:42Z Learning Dynamics and Support for Economic Reforms : Why Good News Can Be Bad van Wijnbergen, Sweder J.G. Willems, Tim ECONOMIC REFORM SPECIAL ECONOMIC ZONES INCOME DISTRIBUTION LEARNING RATIONAL ACTORS PRICE CONTROLS SUBSIDIES PRIVATIZATION TRADE BARRIERS SPATIAL ANALYSIS Support for economic reforms has often shown puzzling dynamics: many reforms that began successfully lost public support. We show that learning dynamics can rationalize this paradox because the process of revealing reform outcomes is an example of sampling without replacement. We show that this concept challenges the conventional wisdom that one should begin by revealing reform winners. It may also lead to situations in which reforms that enjoy both ex ante and ex post majority support will still not come to completion. We use our framework to explain why gradual reforms worked well in China (where successes in Special Economic Zones facilitated further reform), whereas this was much less the case for Latin American and Central and Eastern European countries. 2017-08-09T20:15:51Z 2017-08-09T20:15:51Z 2016-01 Journal Article World Bank Economic Review 1564-698X http://hdl.handle.net/10986/27690 en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Published by Oxford University Press on behalf of the World Bank Publications & Research :: Journal Article Publications & Research Europe and Central Asia Latin America & Caribbean Eastern Europe Latin America China Russian Federation
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	ECONOMIC REFORM SPECIAL ECONOMIC ZONES INCOME DISTRIBUTION LEARNING RATIONAL ACTORS PRICE CONTROLS SUBSIDIES PRIVATIZATION TRADE BARRIERS SPATIAL ANALYSIS
spellingShingle	ECONOMIC REFORM SPECIAL ECONOMIC ZONES INCOME DISTRIBUTION LEARNING RATIONAL ACTORS PRICE CONTROLS SUBSIDIES PRIVATIZATION TRADE BARRIERS SPATIAL ANALYSIS van Wijnbergen, Sweder J.G. Willems, Tim Learning Dynamics and Support for Economic Reforms : Why Good News Can Be Bad
geographic_facet	Europe and Central Asia Latin America & Caribbean Eastern Europe Latin America China Russian Federation
description	Support for economic reforms has often shown puzzling dynamics: many reforms that began successfully lost public support. We show that learning dynamics can rationalize this paradox because the process of revealing reform outcomes is an example of sampling without replacement. We show that this concept challenges the conventional wisdom that one should begin by revealing reform winners. It may also lead to situations in which reforms that enjoy both ex ante and ex post majority support will still not come to completion. We use our framework to explain why gradual reforms worked well in China (where successes in Special Economic Zones facilitated further reform), whereas this was much less the case for Latin American and Central and Eastern European countries.
format	Journal Article
author	van Wijnbergen, Sweder J.G. Willems, Tim
author_facet	van Wijnbergen, Sweder J.G. Willems, Tim
author_sort	van Wijnbergen, Sweder J.G.
title	Learning Dynamics and Support for Economic Reforms : Why Good News Can Be Bad
title_short	Learning Dynamics and Support for Economic Reforms : Why Good News Can Be Bad
title_full	Learning Dynamics and Support for Economic Reforms : Why Good News Can Be Bad
title_fullStr	Learning Dynamics and Support for Economic Reforms : Why Good News Can Be Bad
title_full_unstemmed	Learning Dynamics and Support for Economic Reforms : Why Good News Can Be Bad
title_sort	learning dynamics and support for economic reforms : why good news can be bad
publisher	Published by Oxford University Press on behalf of the World Bank
publishDate	2017
url	http://hdl.handle.net/10986/27690
_version_	1764465904480944128

Learning Dynamics and Support for Economic Reforms : Why Good News Can Be Bad

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