This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper assesses empirically the links among a country's institutions and political environment, its implementation of IMF-supported programs, and macroeconomic performance in a sample of 197 programs approved between 1992 and 2002. We find that a stronger institutional and political environment is associated with better macroeconomic outcomes, especially at longer time horizons. This direct beneficial effect of institutions on macroeconomic outcomes is in addition to their indirect effect through better program implementation. We also find that program implementation exerts an independent influence on macroeconomic outcomes, especially over shorter time horizons of up to two years. Better-implemented programs are associated with lower inflation and with initially weaker but ultimately stronger external and fiscal outcomes, but with a statistically insignificant impact on economic growth.

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If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -The purpose of the paper is to review the issues involved in determining the appropriate speed of adjustment and the sequencing of economic reforms, and to develop a checklist of key guidelines for policymakers as a basis for their decision-making process. Design/methodology/approach -The paper develops a conceptual framework based on a survey of the theoretical and empirical literature, and the practical experience of the authors in this area. Findings -The analysis in the paper shows that the optimal speed and sequence of reforms is country-specific. But key policy considerations can help guide policymakers in the design of their reform strategy. Practical implications -The arguments favoring a shock approach or a gradual approach are not absolute. Each country has to choose the proper speed of adjustment and sequencing of reforms by examining country-specific factors. A thorough case-by-case analysis is needed before a decision on the appropriate timing and sequencing of reforms can be made. Originality/value -The analysis in the paper leads to key reform guidelines for policymakerscovering areas such as prerequisites and resource constraints, political economy considerations, credibility and sustainability of reforms -that are instrumental in developing a well-sequenced strategy. IntroductionThe ongoing adjustment and reform efforts of developing countries, the transformation in Central and Eastern Europe and other transition countries of the former Soviet Union, and the recent crisis in East Asia have brought to the fore the importance of the speed and appropriate sequencing of adjustment efforts [1]. For policymakers, these issues are critical to their decision-making. In fact, over the past several decades, observers of internationally supported adjustment programs have tended to disagree more on the pace and sequence, than on the content, of the reform packages (Collier and Gunning, 1999).

T his paper analyzes the implications of alternative paths of economic reform in the context of an economy with a large public sector that is being transformed to become more market oriented. Two alternative paths to reform can be envisaged. First, the country can move gradually by selectively introducing reforms and spacing them over time. Second, the country can pursue a "big-bang" approach, under which all reforms are immediately and simultaneously introduced.No general consensus has emerged on whether the "big-bang" approach to reform is superior or inferior to a gradualist approach. Further, the order in which reforms should be undertaken has remained a matter of debate. 1 This paper examines the economic setting in China, the country to which the analysis is applied. We develop a dynamic general equilibrium model that is used to analyze the effects of different speeds and sequencing of reforms. The model is solved numerically, permitting us to carry out simulations for different policies. Finally, we conclude by drawing some policy conclusions from the simulations.