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We study the effect of place-based industrial policy on economic development, focusing on the establishment of Special Economic Zones (SEZ) in China. We use data from a panel of Chinese (prefecture-level) cities from 1988 to 2010. Our difference-in-difference estimation exploits the variation in the establishment of SEZ across time and space. We find that the establishment of a state-level SEZ is associated with an increase in the level of GDP of about 20%. This finding is confirmed with alternative specifications and in a sub-sample of inland provinces, where the selection of cities to host the zones was based on administrative criteria. The main channel is a positive effect on physical capital accumulation, although SEZ also have a positive effect on total factor productivity and human capital investments. We also investigate whether there are spillover effects of SEZ on neighboring regions or cities further away. We find positive and often significant spillover effects.

In recent years, the International Monetary Fund (IMF) has re-emerged as a central actor in global economic governance. Its rhetoric and policies suggest that the organization has radically changed the ways in which it offers financial assistance to countries in economic trouble. We revisit two long-standing controversies: Has the policy content of IMF programmes evolved to allow for more policy space? Do these programmes now allow for the protection of labour and social policies? We collected relevant archival material on the IMF's lending operations and identified all policy conditionality in IMF loan agreements between 1985 and 2014, extracting 55,465 individual conditions across 131 countries in total. We find little evidence of a fundamental transformation of IMF conditionality. The organization's post-2008 programmes reincorporated many of the mandated reforms that the organization claims to no longer advocate and the number of conditions has been increasing. We also find that policies introduced to ameliorate the social consequences of IMF macroeconomic advice have been inadequately incorporated into programme design. Drawing on this evidence, we argue that multiple layers of rhetoric and ceremonial reforms have been designed to obscure the actual practice of adjustment programmes, revealing an escalating commitment to hypocrisy.

The emergence of China as a major development partner requires a reassessment of traditional donor–recipient dynamics. In addition to adopting new rhetoric like “South–South cooperation” or “Win–Win,” China has eschewed classifications and practices of the traditional donors of the Organisation for Economic Co-operation and Development’s Development Assistance Committee. Yet the “new approach” and willful ignorance may not spare China from encountering traditional development challenges. In this paper, we consider whether Chinese development efforts have disincentivized difficult economic reforms by providing recipient governments with alternative resources for building support. Using an instrumental variable approach with panel data covering 106 countries during the 2000–2014 period, we find that when comparing Chinese development flows to several Western donors, the former’s flows inhibit broader economic reform. The findings are robust to alternative specifications, data, instruments, and approaches.

Changes in the way health insurers pay healthcare providers may not only directly affect the insurer’s patients but may also affect patients covered by other insurers. We provide evidence of such spillovers in the context of a nationwide Medicare bundled payment reform that was implemented in some areas of the country but not in others, via random assignment. We estimate that the payment reform—which targeted traditional Medicare patients—had effects of similar magnitude on the healthcare experience of nontargeted, privately insured Medicare Advantage patients. We discuss the implications of these findings for estimates of the impact of healthcare payment reforms and more generally for the design of healthcare policy.

In 2003-05 the German government implemented a number of far-reaching labor market reforms y the so-called Hartz reforms. At the heart of the reform package was the Hartz IV law, which resulted in a significant cut in the unemployment benefits for the long-term unemployed. The paper develops a macroeconomic model with search and incomplete markets, calibrates the model economy to German data and institutions, and uses the calibrated model economy to simulate the effects of the Hartz reforms, and in particular Hartz IV, on the German labor market. The paper finds that the Hartz IV reform reduced the noncyclical unemployment rate in Germany by 1.4 percentage points. Employed workers benefited from the Hartz IV reform in welfare terms, but unemployed workers lost. It further finds that the Hartz I—III reforms reduced the noncyclical unemployment rate in Germany by 1.5 percentage points. Finally, the authors' analysis suggests that the Hartz reforms contributed to the good performance of the German labor market during the Great Recession.

Empirical evidence on the relationship between democracy and economic reforms is limited to few reforms, countries, and years. This paper studies the effect of democracy on the adoption of economic reforms using a new dataset on reforms in the financial, capital and banking sectors, product markets, agriculture, and trade for 150 countries over the period 1960-2004. Democracy has a positive and significant impact on the adoption of economic reforms, but there is scarce evidence that economic reforms foster democracy. Our results are robust to the inclusion of a large variety of controls and estimation strategies.

A new data set of on openness indicators and trade liberalization dates allows the 1995 Sachs and Warner study on the relationship between trade openness and economic growth to be extended to the 1990s. New evidence on the time paths of economic growth, physical capital investment, and openness around episodes of trade policy liberalization is also presented. Analysis based on the new data set suggests that over the 1950–98 period, countries that liberalized their trade regimes experienced average annual growth rates that were about 1.5 percentage points higher than before liberalization. Postliberalization investment rates rose 1.5–2.0 percentage points, confirming past findings that liberalization fosters growth in part through its effect on physical capital accumulation. Liberalization raised the average trade to GDP ratio by roughly 5 percentage points, suggesting that trade policy liberalization did indeed raise the actual level of openness of liberalizers. However, these average effects mask large differences across countries.

“Self-Governing Factory” analyzes the Polish Solidarity revolution of 1980–81 and the resulting economic reforms from the micro-historical perspective of a single enterprise—the Small-Engine Car Factory (FSM) in Upper Silesia. The scholarly literature on Solidarity has so far focused primarily on the movement’s intellectuals and national leadership, and has thereby marginalized the industrial workplace, which was the very place where Solidarity arose and the center of its activities. Rather than providing a solution to Poland’s economic predicament, Solidarity’s actions at the factory level instead further undermined the Polish economy. By breaking down the institutional mechanisms and legitimacy of the Polish centrally planned economy, the trade union also unintentionally opened the doors for a gradual re-marketization of the Polish economy that culminated in the communist regime’s decision by the late 1980s to reestablish a market economy. Poland’s break with the Soviet economic model was thus to a substantial extent brought about by great societal upheaval, rather than solely by decisions at the top of the political system. Moreover, seen in a broader chronological framework, Poland’s re-marketization was a protracted evolutionary process, eroding the sharp distinction often drawn in the literature between radical reform in countries like Poland and Russia and Chinese gradualism. These perspectives open up new comparative research agendas on communist economic reforms and their post-communist repercussions. The article is based on original research using a wide variety of Polish-language primary sources, including factory newspapers and trade union publications, as well as state, Communist Party, and corporate archives.

The aim of this paper is to assess and document the experience of the successful irrigated wheat initiative in Ethiopia, identify potential limitations, and suggest alternative options that contribute towards the sustainability of the program. In the past decades, Ethiopia has initiated several projects to ensure food and wheat security but did not achieve the anticipated impact as planned. In 2019, however, the current government of Ethiopia put in place structural, economic, and sectorial reforms, with wheat chosen as a strategic commodity for food security, raw material for the agroindustry, import substitution that transits to export, and job creation along the value chain. With a total of 2.6 million ha of land cultivated under both rain-fed and irrigated systems, followed by a record amount of wheat harvest (8.2 million tons) in 2022, Ethiopia achieved a wheat self-sufficiency ratio of 100% and more than 1 million tons of surplus for export, indicating that the new irrigated wheat initiative of Ethiopia has been found transformational and is becoming a game changer. Moreover, modest case scenario projections revealed that Ethiopia will become a net exporter of wheat by 2023, indicating that the country is achieving not only wheat security but also championing the possibility of replicating Asia’s Green Revolution in Africa. Yet, the sustainability of the current initiative relies on an efficient water management system, private sector engagement, sustainable input supply, well-established input and output marketing systems, and leadership commitment at all levels.