3rd Joint IMF-OECD-World Bank Conference on Structural Reforms

The Coronavirus-related crisis is taking place in a context where many countries were facing rising inequalities and reduced social mobility, leading to a growing sense of unfairness and discontent that was already challenging globalisation and related economic policies.

In fact, following a long liberalization wave in the 1980s and 1990s, the pace of market reforms —drastic changes in labour, product and financial market regulations as well as barriers to trade and FDI — gradually slowed in most advanced and emerging market and developing economies. Outside of crisis periods such as the global financial and euro area crisis, there seems to be waning political appetite for market reforms.

Waning appetite for market reforms may, in part, reflect rising concerns regarding the income distribution effects of liberalizing trade, labour, product and financial markets. For example, there is growing indication that trade liberalization, while raising average incomes, might persistently increase inequality in wages and job opportunities between individual workers and regions. At the same time, available evidence on the distributive effects of various market reforms remains sparse.

Against this background, the conference will explore the impact of various market reforms on income distribution and the extent to which it can be improved through packaging reforms or supplementing them with other policies that enhance their distributive impact. It will also assess the distributional implications of Covid-19 and policy responses through labour market, social protection, healthcare and education channels.

The aim of the conference is to bring together policymakers and practitioners, international institutions, and leading academics to shed light on these issues from both practical and research perspectives, and draw robust and novel policy implications. Some of the key questions the conference will cover include:

• To what extent do pro-growth policies in product, labour, housing and financial markets as well as international trade affect the distribution of income among workers and households? Do these reforms help reduce inequality, or do they instead entail trade-offs between efficiency and equity? What are the channels through which reforms affect income distribution? (employment, non-wage and wage incomes, wage inequality between versus within firms, regional disparities)
• How can policymakers improve the income distribution effects of market reforms? What is the scope for, and impact on income distribution of, packaging different types of reforms, or accompanying them with flanking measures (such as through the tax-benefit system)?
• Do — actual or perceived — income distribution issues affect the political economy of market reforms? What dimensions of inequality create the biggest obstacles to reform, and how can they be addressed?
• How have policies in the area of income support and social protection affected the impact of the on-going crisis on the most vulnerable segments of the population? How should these policies be adjusted as economies reopen, and what should be the reform agenda for an inclusive post-Covid-19 recovery?

REPLAY: IMF, @WorldBank and @OECD chief economists @GitaGopinath, @LauBooneEco, @carmenmreinhart on #COVID19, income inequality and poverty. https://t.co/zrxn7ArWzt

— IMF (@IMFNews) September 24, 2020