The political economy of policy reform: insights from Southeast Asia

Although it may not seem obvious to non-economists, economists broadly agree on many key economic policy issues. But economics as a discipline has provided much less guidance on why and how economic policy reform occurs, and how to develop institutional mechanisms that enable governments to adopt ‘good’ economic policy. Political scientists are adept at identifying coalitions, constituencies, institutions and interest groups, but they less commonly examine the implications for economic policy. Thus, work at the intersection between economics and politics, of why and how policy reform takes place, remains relatively unexplored territory. There is no generally accepted template, much less a ‘rule book’, for how to engineer successful policy reform. This is especially so in developing countries: political processes are more personalistic, institutions are often less well established, outcomes are more fluid, and the detailed case study literature on economic policy making is in its infancy. We therefore need more case study evidence, of both success and failure, to understand why and how successful reform occurs.