The Post-Crisis Growth Slowdown in Emerging Economies and the Role of Structural Reforms

This paper constructs indicators of structural bottlenecks arising from barriers to open markets, obstacles to business operations, and constraints to access to finance. Empirical evidence from a sample of 30 emerging economies indicates that barriers to open markets and access to finance are signif...

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Bibliographic Details
Main Authors	Qureshi, Zia, Diaz-Sanchez, Jose L, Varoudakis, Aristomene
Format	Publication
Language	English
Published	World Bank Group, Washington, DC 2014
Subjects	ACCESS TO CREDIT ACCESS TO FINANCE ACCOUNTING ADVANCED ECONOMIES ADVANCED ECONOMY AFFILIATED ORGANIZATIONS AGRICULTURE BANK POLICY BANKING SYSTEMS BUSINESS CLIMATE BUSINESS ENVIRONMENT BUSINESS ENVIRONMENTS BUSINESS REGULATION BUSINESS REGULATIONS CAPITAL MARKETS COLLATERAL COMMERCIAL DISPUTE COMPETITION POLICY COMPETITIVENESS COMPOSITE INDEXES CORPORATE DEBT CORPORATE INSIDERS CREDIT INFORMATION CREDIT REGISTRIES CREDITORS DEBT DEBT CRISIS DEBT RECOVERY DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISCLOSURE DOMESTIC COMPETITION ECONOMIC GROWTH ECONOMIC OUTLOOK ECONOMIC PERFORMANCE ECONOMIC SURVEYS ECONOMIES OF SCALE EMERGING ECONOMIES EMERGING ECONOMY EMERGING MARKET EMERGING MARKET ECONOMIES ENABLING ENVIRONMENT ENTERPRISE PERFORMANCE ENTREPRENEURS EXPORT MARKETS EXTERNAL SHOCKS FACTOR MARKETS FINANCIAL CRISIS FINANCIAL DISTRESS FINANCIAL SYSTEM FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT GDP GLOBAL ECONOMY GROWTH RATE INCOME INCOME LEVELS INFORMAL ECONOMY INSTITUTIONAL REFORMS INTERNATIONAL BANK INTERNATIONAL TRADE INVESTMENT CLIMATE JOB CREATION LEGAL RIGHTS LENDERS LIABILITY MACROECONOMIC PERFORMANCE MACROECONOMIC POLICY MARKET DOMINANCE MARKET ENTRY MARKET REGULATION MIDDLE-INCOME COUNTRIES MIDDLE-INCOME ECONOMIES MONOPOLY MULTIPLIER EFFECT NATIONAL INCOME NEW BUSINESSES NEW MARKET OPEN MARKETS POLICY ENVIRONMENT POPULATION AGEING POST-CRISIS PERIOD POST-CRISIS PERIODS PRIVATE INVESTMENT PROTECTING INVESTORS PUBLIC INVESTMENTS REAL GDP RECESSION RED TAPE REGULATORY REFORM RENT SEEKING RETURNS SAVINGS SHAREHOLDER SHAREHOLDERS SOVEREIGN DEBT TOTAL FACTOR PRODUCTIVITY TOTAL FACTOR PRODUCTIVITY GROWTH TRADE BARRIERS TRADING TRANSPARENCY UNEMPLOYMENT UNION USE OF COLLATERAL VOLATILITY WORLD ECONOMY WORLD TRADE WORLD TRADE ORGANIZATION WTO
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Summary:	This paper constructs indicators of structural bottlenecks arising from barriers to open markets, obstacles to business operations, and constraints to access to finance. Empirical evidence from a sample of 30 emerging economies indicates that barriers to open markets and access to finance are significantly associated with differences in total factor productivity growth in the post-global financial crisis period compared with the pre-crisis period -- with countries with fewer barriers showing stronger recovery and resilience. Barriers to access to finance are also associated with differences in the performance of private investment. Reforms to improve the policy framework in these areas, up to the level of the best-ranking countries, could offset the recently observed growth slowdown in emerging economies. These reforms would revitalize potential growth and mitigate the risks from external shocks associated with the global environment in the transition from the global financial crisis.
Bibliography:	This paper constructs indicators of structural bottlenecks arising from barriers to open markets, obstacles to business operations, and constraints to access to finance. Empirical evidence from a sample of 30 emerging economies indicates that barriers to open markets and access to finance are significantly associated with differences in total factor productivity growth in the post-global financial crisis period compared with the pre-crisis period -- with countries with fewer barriers showing stronger recovery and resilience. Barriers to access to finance are also associated with differences in the performance of private investment. Reforms to improve the policy framework in these areas, up to the level of the best-ranking countries, could offset the recently observed growth slowdown in emerging economies. These reforms would revitalize potential growth and mitigate the risks from external shocks associated with the global environment in the transition from the global financial crisis.