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Title: Uncertainty, informational spillovers and policy reform: A gravity model approach
Authors: Fidrmuc, J
Karaja, E
Keywords: Economic reform;Democratization;Institutions;Uncertainty;Spillovers
Issue Date: 2013
Publisher: Elsevier Science Inc.
Citation: European Journal of Political Economy, 32, 182 - 192, 2013
Abstract: Reforms often occur in waves, seemingly cascading from country to country. We argue that such reform waves can be driven by informational spillovers: uncertainty about the outcome of reform is reduced by learning from the experience of similar countries. We motivate this hypothesis with a simple theoretical model of informational spillovers and learning, and then test it empirically using an approach inspired by the gravity model. We find evidence of informational spillovers both with respect to both political and economic liberalization. While the previous literature has focused only on economic reform, we find that the spillovers are particularly important for political changes.
Description: This is the post-print version of the final paper published in the European Journal of Political Economy. The published article is available from the link below. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. Copyright @ 2013 Elsevier B.V.
ISSN: 0176-2680
Appears in Collections:Economics and Finance
Dept of Economics and Finance Research Papers

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