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SPP 321

Author: Bernd Hayo
Description: This paper looks at public support for the creation of a market economy in Eastern Europe. As a data base, the Central and Eastern Eurobarometers are employed, which cover up to 21 countries over a time period of 1990-96. The development of support for market reforms is analysed over time and countries, and in a number of panel regressions, individual and macroeconomic determinants of support for reforms are studied. Support for the creation of a market economy is stronger if the respondents are relatively rich, more educated, male, and relatively young. On an aggregate level, those countries that are able to keep inflation low get more support for market reforms, while differences in employment or GDP per capita do not seem to matter much. Finally, in terms of microeconomic reforms, there is some evidence that price liberalisation, free trade and competition policy influence public support positively, while banking reforms have an adverse effect.

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