Country Insurance

Eduardo Levy Yeyati and Tito Cordella

No 2004/148, IMF Working Papers from International Monetary Fund

Abstract: In this paper, we examine how the presence of country insurance schemes affects policymakers' incentives to undertake reforms. Such schemes (especially when made contingent on negative external shocks) are more likely to foster than to delay reform in crisis-prone volatile economies. The consequences of country insurance, however, hinge on the nature of the reforms being considered: "buffering" reforms, aimed at mitigating the cost of crises, could be partially substituted for, and ultimately discouraged by, insurance. By contrast, "enhancing" reforms that pay off more generously in the absence of a crisis are likely to be promoted.

Keywords: WP; country insurance; reform effort (search for similar items in EconPapers)
Pages: 26
Date: 2004-08-01
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Country Insurance (2005)
Working Paper: Country Insurance (2004)
Working Paper: Country Insurance (2004)
Working Paper: Country Insurance (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2004/148

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