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.
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.
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.
One would also expect complementary liberalizing reforms in other areas of economic and social policy.
Both trends reinforce the emerging dependency of the exporting country on the liberalizing country.
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.
Therefore, it might be preferable to raise energy prices first, before liberalizing capital and trade flows.
Thus, a partial trade reform focusing only on liberalizing non-agricultural imports is not desirable.
