By Angana Banerji and Christian Ebeke

September 22, 2017

Structural reforms can jumpstart productivity in countries with weaker initial productivity, and help them catch up with their peers (photo: The Palmer/iStock).

Labor and product market reforms, which make economies more efficient, can benefit all countries. But they are especially helpful in jumpstarting productivity in countries where productivity is weaker. This is good news as it implies that reforms are one route through which countries with lower per capita incomes can catch up with richer countries instead of persistently lagging behind: economic hardship is not destiny. Our new paper provides fresh arguments in favor of the often-difficult structural reforms. […]