This presentation is based on an article published in the journal Public Sector Economics that evaluates the economic outcomes of public policy reforms, including productivity, investment, employment and long-term per capita income in OECD and non-OECD countries. The paper finds that more competition-friendly product market regulations are associated with improved economic outcomes, and more flexible labour market regulations with higher employment rates. In particular, there is a robust relationship between lower barriers to entry and less pervasive state control over the business sector on the one hand, and larger capital stock and higher employment rates on the other. In addition, the quality of institutions strongly affects the economic performance. Policy reforms interact with each other, attenuating and amplifying each others’ effects.

 

The presentation was moderated by Dubravko Mihaljek, Head of Operations, Monetary and Economic Department, Bank for International Settlements in Basel. A recording and a presentation of this interesting and valuable lecture are also available.