OECD Economics Department Working Papers
The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.
- ISSN: 18151973 (online)
- https://doi.org/10.1787/18151973
On the Sequencing of Structural Reforms
Both OECD and developing economies have embarked on structural reforms aimed at dismantling regulations and reducing the extent of distortions affecting different sectors of their economies. Regardless of the marked differences, both groups have to deal with the problems of the appropriate sequencing and speed of reforms. This paper first critically reviews the LDC related literature on sequencing and speed of structural reforms drawing out features which are of relevance for OECD economies. The paper then develops a formal framework based on a welfare criterion for evaluating different sequencing scenarios. The framework emphasises the microeconomic or efficiency effects of structural policies paying particular attention to the way in which distortions interact both intra and inter temporally. The framework is then used to discuss some of the important issues such as the sequencing of micro and macro reforms ("competition of instruments"), broad front versus sequential ...
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