Economic policy reform:measurement, causes and consequences

In the aftermath of the Great Recession it has become clear that significant problems with government debt exist in developed economies. To restore sustainability of fiscal policy governments need to implement (successful) economic reforms. This thesis investigates under which economic and political circumstances we can expect economic reforms to occur, and to become successful. To assess the question at the country level, an improved measurement method to identify reforms is developed. It is used to investigate the factors that lead to successful healthcare financing privatisations and successful improvements of the government budget balance. The general finding is that macro economic conditions play a large role in determining when (successful) reforms are likely to take place. The improved measurement method is also used to show that healthcare financing privatisations curb healthcare expenditures. This finding must be interpreted with care though, as the cost saving may come from reduced healthcare quality. To assess the question at the individual voter level, a laboratory voting experiment is developed. It investigates the trade-off between economic and ideological preferences that determine voting decisions. The general finding is that although ideological/moral preferences matter increasingly in large elections, the main driver of voting decisions is the individuals’ pocketbook