Structural Reforms and Economic Performance in Advance and Developing Countries

Economic policy agendas in member countries - even as they have been dominated over the past year by the response to the global financial crisis - will, going forward, increasingly need to refocus on core issues related to strengthening medium-run economic performance, including both average growth and resilience to shocks. This paper examines the contribution of structural policies - that is, policies that increase the role of market forces and competition in the economy, while maintaining appropriate regulatory frameworks to deal with market failures - to economic performance. The results are based on a new dataset covering reforms of domestic product markets, international trade, the domestic financial sector, and the external capital account, in 91 developed and developing countries.