In part because of the communications revolution and the substantially reduced costs of transacting from great distances, businesses have sought more globally integrated production processes, and investors have required the development of financial instruments to facilitate their demand for international portfolio diversification. Such developments have put enormous pressure on policymakers to loosen their grip or abandon policies that led to the misallocation of resources.
Indeed, the objectives of the reforms, which involve many sectors of the economy, center on fostering competition and market flexibility, thereby allowing for a more efficient allocation of resources as well as lower prices of productive inputs and of final goods and services. The welfare gains from these changes, if fully implemented, could be significant.