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The Inverse Domino Effect: Are Economic Reforms Contagious?*

Gassebner, M and Gaston, N and Lamla, MJ (2011) 'The Inverse Domino Effect: Are Economic Reforms Contagious?*.' International Economic Review, 52 (1). 183 - 200. ISSN 0020-6598

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Abstract

This article examines whether a country's economic reforms are affected by reforms adopted by other countries. Our theoretical model predicts that reforms are more likely when factors of production are internationally mobile and reforms are pursued in other economies. Using the change in the Index of Economic Freedom as the measure of market-liberalizing reforms and panel data (144 countries, 1995-2006), we test our model. We find evidence of the spillover of reforms. Moreover, consistent with our model, international trade isnota vehicle for the diffusion of economic reforms; rather the most important mechanism is geographical or cultural proximity. © (2011) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Item Type: Article
Subjects: H Social Sciences > HG Finance
Divisions: Faculty of Social Sciences > Essex Business School
Depositing User: Jo Wiltshire
Date Deposited: 18 Sep 2013 10:30
Last Modified: 11 Nov 2019 22:15
URI: http://repository.essex.ac.uk/id/eprint/7647

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