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Learning and economic policy choices

Meseguer, Covadonga (2006) Learning and economic policy choices. European Journal of Political Economy, 22 (1). pp. 156-178. ISSN 0176-2680

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Identification Number: 10.1016/j.ejpoleco.2005.06.002

Abstract

This paper investigates whether governments embark on market-oriented reforms as a result of learning. I assume that governments are rational learners who update initial beliefs about the effectiveness of different policies and choose policies on the basis of the updated beliefs. The model of learning is applied to four policy choices: the decision to grant independence to central banks, the decision to liberalize trade, the decision to privatize, and the decision to enter into agreements with the IMF. I also explore whether convergence toward neo-liberal economic policies results from external imposition or simple imitation. I find that learning, in isolation from or in combination with the other mechanisms, explains the decision to liberalize trade, to privatize, and to enter into agreements with the IMF, while none of the mechanisms of convergence explains why governments grant independence to central banks.

Item Type: Article
Official URL: http://www.sciencedirect.com/science/journal/01762...
Additional Information: © 2005 Elsevier B.V.
Divisions: International Relations
Subjects: H Social Sciences > HC Economic History and Conditions
J Political Science > JC Political theory
J Political Science > JF Political institutions (General)
JEL classification: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D78 - Positive Analysis of Policy-Making and Implementation
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief
Sets: Departments > International Relations
Date Deposited: 07 Oct 2015 10:40
Last Modified: 20 May 2019 00:50
URI: http://eprints.lse.ac.uk/id/eprint/63894

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