What triggers reforms in OECD countries? Improved reform measurement and evidence from the healthcare sector

Partisan politics: The empirical evidence from OECD panel studies

“…Wiese (2014) Potrafke (2010b) examines whether government ideology influenced product market deregulation by using data on non-manufacturing regulation indicators (Conway and Nicoletti 2006). The indicators measure restrictions on competition in the seven most regulated industries in OECD countries (electricity, gas, air passenger transport, rail transport, road freight, postal services and telecommunications -summarized by ETCR) and assume values between 0 (minimum of regulation) and 6 (maximum of regulation).…”

Social trust, institutional and political constraints on the executive and deregulation of markets

“…Wiese, 2014;Pitlik and Wirth, 2003); (2) the mean unemployment rate over the three prior years (LAG_UNEMP) to signal severe economic turbulences not captured by the financial crisis dummy variable; averages over three years are taken to separate structural unemployment from short-run business-cycle-related unemployment; the higher the mean unemployment rate the higher are the waiting costs of nonreforming; hence a positive relationship with D_REG is expected; (3) the mean consumer-price inflation (absolute value thereof to avoid canceling of (high) negative and positive entries) over the three prior years (LAG_INFL); similar to LAG_UNEMP, this variable intends to capture economic turbulences but with a focus on product markets; on the one hand persistent highly positive or negative rates of inflation may signal high waiting costs of nonreforming; this suggests a positive correlation of LAG_INFL with D_REG; yet, as policy responses to high inflation might very well be in form of tighter price controls, that is more regulation, a negatively signed coefficient is also plausible a priori; (4) the level of a country's economic development, as proxied by (the log of) GDP per capita in PPP (LAG_GDPCAP) is included in our empirical model not in the least to avoid that SOCIALTRUST and AV_SOCIALTRUST merely pick-up the effect of development levels (e.g., Paldam, 2009); moreover, GDP per capita frequently is used to capture many aspects of a country's institutional environment in a general way (e.g., Benassy-Quere et al, 2007). 7 The Scandinavian countries and Finland have entry zero in DISTANCE.…”

“…A key ingredient of this model is the conflict among the executive over the distribution of costs of reform (Alesina et al, 2006). This conflict leads to delay of stabilization reforms, as a "waiting game" is played (Wiese, 2014). The essence of the model is that only the passage of time can reveal which of the opponents is weaker due to higher waiting costs.…”

“…1 In contrast, Heckelman and Knack (2008) establish that higher aid slowed liberalizing economic reform despite foreign aid being frequently granted to help developing countries in such reforms. Wiese (2014) analyses reforms in the healthcare sector among OECD countries. He uses both, economic output and policy input data to isolate successful reforms which he then relates to a variety of factors including political and institutional variables.…”

Reforming the Public Administration: The Role of Crisis and the Power of Bureaucracy

“…Typical outcome-related reform indicators like public spending or number of staff suffer from a fundamental identification problem since exogenous factors (business cycle, expectations, financial market conditions etc.) may impact the measurable outcome so that the contribution of a preceding reform is hardly recognizable (Wiese, 2014). To some extent, this problem also holds for those reform indicators which like the World Bank Doing Business Indicators or indicators of economic freedom are based on expert surveys.…”