Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93433
Authors: 
Jain, Sanjay
Majumdar, Sumon
Mukand, Sharun
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 4648
Abstract: 
This paper develops a dynamic framework to analyze the political sustainability of economic reforms in developing countries. First, we demonstrate that economic reforms that are proceeding successfully may run into a political impasse, with the reform's initial success having a negative impact on its political sustainability. Second, we demonstrate that greater state capacity, to make compensatory transfers to those adversely affected by reform, need not always help the political sustainability of reform, but can also hinder it. Finally, we argue that in ethnically divided societies, economic reform may be completed not despite ethnic conflict, but because of it.
Subjects: 
economic reform
state capacity
politics
redistribution
compensation
ethnic conflict.
JEL: 
D72
O20
P16
Document Type: 
Working Paper

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