The mantra of economic reform is on the lips of every academic, consultant and political honcho these days. Greece, of course, is supposed to understand that structural reform is the only path out of depression, but the other peripheral eurozone countries must not delay reforms either. Further east, China and Japan have come to a point where only thoroughgoing reforms can enable them to continue to grow and develop. Developing countries too should recognize that “institutions” ultimately determine economic performance, so their true agenda is reform. Reform, reform, reform.
Put aside for a moment the bland, indistinct nature of this word reform, which can mean almost anything you want it to. Suppose for the moment it actually signifies something in particular. My question is, what country at what time has ever instituted such a reform program with measurable results? Is there any precedent at all? Any systematic policy-driven transformation of administrative transparency, economic incentives, organizational effectiveness? Or is the talk of reform simply a polite way to avoid dealing with the real issues?