At Different Speeds: Recovering from the Asian Crisis:On the importance of policy complementarities for growth
Rocha, Bruno | February 2007
This paper begins with a short review and discussion of the literature on policy complementarities and its implications in terms of (sustainable) growth strategies and the possible emergence of a new policymaking paradigm. Thereafter, it analyses the effect on growth of complementarities in structural policies in the specific context of a post-crisis recovery. The application of this framework to the Asian crisis can be regarded as a natural experiment. As the result of computing a complementarity indicator and a reform level indicator adjusted for complementarity for the most affected economies—Indonesia, the Republic of Korea, Malaysia, and Thailand—this study finds that these indicators, for which a comprehensive group of policy areas was considered, are clearly related to higher immediate resilience and to faster recoveries. The results suggest that while augmenting the levels of the so-called orthodox policies is necessary, it is not sufficient to generate high sustainable growth trajectories, as they must be complemented with other policies and evolve in a parallel way.
CitationRocha, Bruno. 2007. At Different Speeds: Recovering from the Asian Crisis:On the importance of policy complementarities for growth. © Asian Development Bank. http://hdl.handle.net/11540/3648. License: CC BY 3.0 IGO.
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