The political economy of policy reform: The case of the Dominican Republic

This paper provides a theoretical framework for the analysis of the political economy of policy reform in developing countries with presidential regimes. Drawing from the Dominican Republic's reform experience in the mid-nineties, I build a model aimed to replicate interactions between political agents throughout the discussion process of a policy reform in the Congress of a developing country. A reform-committed president is the agenda-setter and decides between total liberalization and a protectionist status quo. If the president decides to liberalize, he submits to an opposition-led Congress a tariff-reform. Congress' decision on approving or rejecting the proposal depends on the contribution of rival lobbies, which plays a non-cooperative game within the overall game. The model shows how lobby's behavior depends on the decision made by its rival and how the equilibrium of the lobbying game ultimately determines the presidents choice. In addition, it explains why in developing countries with a large authoritarian history, reforms are constantly delayed.