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The main contribution of this paper is the development of a novel and versatile methodology to identify economic reforms. The methodology is a combination of the Bai & Perron structural break filter, and validation of the structural breaks identified using de jure evidence of reforms. The procedure is sequential and it ensures that the identified reforms originate from policy changes and that these have a statistically significant impact on economic data. This paper also adds new empirical evidence to the political economy literature of determinants of economic reforms. Applying the methodology to the healthcare sector allows us to identify 22 de facto healthcare financing privatisations in a sample of 23 OECD countries. It is analysed which factors trigger or hinder healthcare financing privatisations. Robust evidence is found in favour of the 'crises induce reform hypothesis'. Contrary to theory and conventional wisdom, robust evidence is found that political factors do not have an impact. [Copyright Elsevier B.V.]

This paper adds new empirical evidence to the political economy literature of economic reform. One of the main contributions of this paper is the development of a novel methodology to identify privatisations. The methodology is a combination of the Bai & Perron structural break filter, and validation of the breaks identified by this filter using de jure evidence of reforms. 21 de facto healthcare financing privatisations are identified in a sample of 23 OECD countries. It is analysed which factors trigger or hinder these privatisations. Robust evidence is found in favour of the 'crises induce reform hypothesis'. That is, severe economic recessions, high levels of unemployment and high interest rates on government debt trigger privatisations. Contrary to theory and conventional wisdom, robust evidence is found that political factors do not have an impact. Ideology, government or political fractionalisation, or major cabinet changes are not found to significantly affect the likelihood of healthcare financing privatisations.

Abstract
Fiscal rules are increasingly promoted by international organizations. We investigate whether fiscal rules are effective in achieving sustained debt reduction during periods of fiscal consolidation using data from 19 OECD countries. The analysis is based on an extended version of the International Monetary Fund's fiscal rules database. Fiscal consolidation periods are identified using a novel method that takes differences in the variability of fiscal balances into account. We find: (i) the EU's Stability and Growth Pact is associated with sustained debt reduction while it is more doubtful if the mere existence of national fiscal rules has an effect. (ii) Fiscal rules have a stronger association with sustained debt reduction when they are embedded in a stricter national institutional framework (JEL codes: H6).

Healthcare reforms have long been advocated as a cure to the increasing healthcare expenditures in advanced economies. Nevertheless, it has not been established whether a market solution via private financing, rather than public financing, curb aggregate healthcare expenditures. To our knowledge, this paper is the first that quantifies the impact of reforms that significantly increases (decreases) the private (public) share of healthcare financing on total healthcare expenditures relative to income in 20 OECD countries. Our reform measure is based on structural break testing of the private share of total expenditures, and verification using evidence of policy reforms. To quantify the effect of these reforms we apply Propensity Score Matching and Inverse Probability Weighted regression analysis. Over a 5-year evaluation period the reforms lead to an accumulated cost saving 0.45 percentage points of GDP. The yearly effects of the reforms are largest in the first years in the post-reform period and decreases in size as a function of time since the reform. Our findings suggest that the investigated healthcare reforms have a relatively short-lived effect on aggregate health spending relative to GDP. The findings are robust to various sensitivity tests.

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.

We test the theory of expressive voting in relation to political ideology in a laboratory experiment. After deriving our hypotheses from a decision theoretic model, we examine voting decisions in an experiment in which we use the size of the electorate as the treatment variable. Using a Heckman selection model that includes both the electoral participation decision and voting choice decision, we find mixed results for the expressive voting hypothesis. In line with expressive voting, our findings suggest that non-ideological voters are more likely to abstain from voting than ideological voters especially when the electorate grows large. Concerning the voting choice decision between an equal but inefficient, and an unequal but efficient income distribution the evidence for expressive voting is mixed. We do find that voters with socialist (left wing) preferences behave expressively, but we do not find this effect for voters with capitalist (right wing) preferences.

We test the theory of expressive voting in relation to political ideology in a laboratory experiment. After deriving our hypotheses from a decision theoretic model, we examine voting decisions in an experiment in which we use the size of the electorate as the treatment variable. Using a Heckman selection model that includes both the electoral participation decision and voting choice decision, we find mixed results for the expressive voting hypothesis. In line with expressive voting, our findings suggest that non-ideological voters are more likely to abstain from voting than ideological voters – especially when the electorate grows large. Concerning the voting choice decision between an equal but inefficient, and an unequal but efficient income distribution the evidence for expressive voting is mixed. We do find that voters with socialist (left wing) preferences behave expressively, but we do not find this effect for voters with capitalist preferences.

We examine the predictive validity of survey-measured left-right politicalideology by testing whether this measure is able to explain observed choices regarding equality versus efficiency. We study this in a real-effort distributionexperiment, in which decision-makers allocate money equally or efficiently. Wedistinguish between decision-makers that receive 'manna-from-heaven' and decision-makers that have earned the money to be distributed in a real effort task. We find that, conditional on entitlement concerns, self-reported right-wing ideology significantly predicts preferences for efficiency. Reported left-wing ideology does not have predictive value in explaining preferences for equality. ; info:eu-repo/semantics/published

We examine the predictive validity of survey-measured left-right political ideology by testing whether this measure is able to explain observed choices regarding equality versus efficiency. We study this in a real-effort distribution experiment, in which decision-makers allocate money equally or efficiently. We distinguish between decision-makers that receive 'manna-from-heaven' and decision-makers that have earned the money to be distributed in a real effort task. We find that, conditional on entitlement concerns, self-reported right-wing ideology significantly predicts preferences for efficiency. Reported left-wing ideology does not have predictive value in explaining preferences for equality.