Template-Type: ReDIF-Paper 1.0 Author-Name: Gunes Gokmen Author-X-Name-First: Gunes Author-X-Name-Last: Gokmen Author-Name: Tommaso Nannicini Author-X-Name-First: Tommaso Author-X-Name-Last: Nannicini Author-Name: Massimiliano Gaetano Onorato Author-X-Name-First: Massimiliano Gaetano Author-X-Name-Last: Onorato Author-Email: massimiliano.onorato@unicatt.it Author-Workplace-Name: Università Cattolica del Sacro Cuore Author-Workplace-Name: Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore Author-Name: Chris Papageorgiou Author-X-Name-First: Chris Author-X-Name-Last: Papageorgiou Title: Policies in Hard Times: Assessing the Impact of Financial Crises on Structural Reforms. Abstract: It is argued that crises open up a window of opportunity to implement policies that otherwise would not have the necessary political backing. The argument goes that the political cost of deep reforms declines as crises unravel structural problems that need to be urgently recti ed and the public is more willing to bear the pains associated with such reforms. This paper casts doubt on this prevalent view by showing that not only the crises-reforms hypothesis is unfounded in the data, but rather crises are associated with slowing structural reforms depending on the institutional environment. In particular, we look at measures of liberalization in international trade, agriculture, network industries, and nancial markets. We nd that, after a nancial crisis, democracies neither open nor close their economy. On the contrary, autocracies reduce liberalizations in multiple economic sectors, as the fear of regime change might lead non- democratic rulers to please vested economic interests. Length: 29 Creation-Date: 2017-09 File-URL: http://dipartimenti.unicatt.it/economia-finanza-def061.pdf File-Format: Application/pdf File-Function: First version, 2017 Number: def061 Classification-JEL: E44, G01, L51, P16. Keywords: Financial crises, structural reforms, institutional systems, IMF programs, govern- ment crises, public opinion. Handle: RePEc:ctc:serie1:def061