Economists have recently underscored that the failure of market reforms in producing sustained growth in emerging markets is the result of poor advice from the International Monetary Fund, as well as of erroneous macroeconomic policies of domestic decision makers. This article proposes a complementary hypothesis. If market reforms are enacted in a political system with weak accountability institutions, then one should expect the executive to manipulate such reforms in pursuit of such old-fashioned practices as collusion between government and business, political patronage, and corruption. This, in turn, ends up depriving a given economy of potential advantages that could have accrued had the reforms promoted true competition rather than reallocating monopolistic rents and squandering a large amount of resources.


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pp. 315-360
Launched on MUSE
Open Access
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