Prerequisites for Successful Fiscal Reform: Some Preliminary Results

This paper examines whether any relationship exists between success or failure of policy reform on the one hand, and various political/economic conditions in place at the time of reform on the other. Nineteen countries were scored using three financial variables to measure the degree of success or failure of the reform. The independent variables were country scores for ten different economic and political conditions. The independent variables were used to try and predict a priori which of the nineteen countries would succeed and which would fail. Eighteen of the nineteen countries were correctly placed into their respective success group. However only three of the ten conditions appeared important in predicting success: a visionary leader, a crisis, and a comprehensive program. Other writers have suggested different sets of predicting variables.