Constitutionalism and Credibility in Post-Communist Economies

Georgetown University School of Foreign Service Working Paper

23 Pages Posted: 2 May 2005

See all articles by Raj M. Desai

Raj M. Desai

Georgetown University; The Brookings Institution

Anders Olofsgård

Georgetown University - Edmund A. Walsh School of Foreign Service (SFS); SITE-SSE

Date Written: March 2005

Abstract

There has been relatively little investigation of the relationship between constitutional transformations and the economic transition in post-communist countries. We develop a simple signaling model in which constitutionalism - a commitment to limit political power and provide judicial defense of basic rights - reinforces the credibility of pro-market candidates' electoral promises and boosts public support for economic reforms. These findings are tested using opinion poll data on public support for reform in Central and Eastern Europe, and in the former Soviet Union, in the 1990s. In a two stage procedure we show that public support for market reforms are higher in countries where incumbents have taken deliberate steps to increase political accountability and judicial independence. Public support also spurs actual economic reform.

Keywords: Political Economy, Transition, Institutions, Signaling

JEL Classification: D72, D73, P20, P26

Suggested Citation

Desai, Raj M. and Olofsgard, Anders and Olofsgard, Anders, Constitutionalism and Credibility in Post-Communist Economies (March 2005). Georgetown University School of Foreign Service Working Paper, Available at SSRN: https://ssrn.com/abstract=709144 or http://dx.doi.org/10.2139/ssrn.709144

Raj M. Desai (Contact Author)

Georgetown University ( email )

3700 O ST NW
Washington, DC 20057-0002
United States
2026872925 (Phone)

The Brookings Institution ( email )

1775 Massachusetts Ave., NW
Washington, DC 20036
United States

Anders Olofsgard

Georgetown University - Edmund A. Walsh School of Foreign Service (SFS) ( email )

Washington, DC 20057
United States

SITE-SSE ( email )

Stockholm
Sweden

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