Deep Crises and Reform: What Have We Learned? (Directions in Development)

This paper was first presented as the author ' s address, as president, to the 1995 Congress of the International Economic Association in Tunis. It looks at the question of whether deep economic crisis brings about stabilization and reform. The author examines different influences on crises including high and low inflation, political polarization and foreign aid. The report also looks at the results of reform including stabilization, trade liberalization, and economic growth. The author concludes that even if high-inflation crises play a role in stimulating adjustment, more thought should be given to designing less costly ways of promoting reform.