Opinion & Analysis

What structural reform is and why it is important

What can governments do to power economic growth? Most economists believe that governments need to help markets work efficiently: enforcing contracts, resolving insolvencies, hooking up firms to the power grid, and the like. The World Bank has an annual ranking of how efficient governments are: the latest tables were released in October. In many countries governments make it tough to do business: in Madagascar it can take a business well over a year to get electricity. The Economist often recommends “structural reform” as one cure for economic ills. But what exactly do we mean?