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If liberalization proceeds gradually, exporters might start to build specific capacities to export into the liberalizing country.
Both countries went through parallel transition paths, and yet were late in liberalizing.
Liberalizing trends have generally persisted - often despite one or more serious financial crises.
If a post-crisis liberalizing tendency exists, it is time-specific and requires explanation.
Because the implicit guarantee against failure remained in the wake of liberalizing policies, banks did not entertain the possibility of their own bankruptcy.
In contrast, the outsider concentrated group coalition will be more concerned with liberalizing capital flows than with allowing foreign entry into the domestic financial sector.
The general trajectory of a regime backsliding on its liberalizing promises emerges clearly.
Thus, a partial trade reform focusing only on liberalizing non-agricultural imports is not desirable.
Therefore, it might be preferable to raise energy prices first, before liberalizing capital and trade flows.
In transitions to the liberal labour model, labour market liberalization is accompanied by complementary institutional change in the shape of liberalizing measures in other areas.
Both trends reinforce the emerging dependency of the exporting country on the liberalizing country.
One would also expect complementary liberalizing reforms in other areas of economic and social policy.
But, among the available policy tools, liberalizing capital flows and, even more so, attracting greater foreign entry into domestic financial markets, play minor, hence discretionary roles.
For their successful implementation, liberalizing labour reforms also depend on the existence of a political alliance prepared to discard corporatist approaches in favour of a liberal alternative.
Dispersed group pressure for liberalizing reform should be greater when interventionist policies enjoy a weaker performance record, including any associations with strongly illegitimate political regimes or foreign influences.
