THE RELATIONSHIP BETWEEN ECONOMIC FREEDOM AND ECONOMIC DYNAMISM

We analyze the consequences of economic freedom on economic dynamism across U.S. states and over time. Using data from the Economic Freedom of North America index, we show that states with greater economic freedom have higher rates of gross and net job creation and establishment entry. The results are robust to the inclusion of many different control variables and alternative specifications, suggesting a connection between freedom and dynamism. This evidence supports theories in which government policies may impede business dynamism. (JEL 043, P16, R5)     

AID, ECONOMIC FREEDOM, AND GROWTH

Foreign aid has often been intended by donors to entice recipient nations into policy and institutional reforms favorable to private sector economic development. In this study, we investigate the relationship between aid and changes to economic freedom in recipient nations over the 1990–2000 decade. The evidence is mixed. In general, we find that foreign aid has no significant effect on economic freedom overall. However, using a hedonic approach on the different categories of economic freedom, we find that aid has still managed to contribute toward a policy and institutional environment favorable to growth, as the different categories of economic freedom improved by aid more than offset those which are harmed by aid, in terms of their impact on growth . ( JEL 010, 019)     

VOTER PREFERENCES,INSTITUTIONS, AND ECONOMIC FREEDOM

The enormous impact that economic freedom can have on economic outcomes makes an understanding of the factors or forces affecting its level paramount. To what extent do citizen preferences regarding the role of government in the economy drive the level of or changes in economic freedom? We explore this question using a new index of voting in the U.S. Congress constructed consistent with the Fraser Institute indices of economic freedom. We use voting on national legislation to examine state‐level economic freedom to clearly separate the measurement of preferences from policies that at least partly reflect these preferences. We find that Congressional votes, both from the House and Senate, are related to increases in state economic freedom, and that the result is generally statistically and economically significant, and robust to inclusion of a variety of socioeconomic control variables. (JEL D72, H10, H50)     

ECONOMIC FREEDOM AND LABOR MARKET CONDITIONS: EVIDENCE FROM THE STATES

Using 1981–2009 data for the 50 states, this article examines the relationship between economic freedom and the unemployment rate, the labor force participation rate, and the employment‐population ratio. After controlling for a variety of state‐level characteristics, the results from most specifications indicate that economic freedom is associated with lower unemployment and with higher labor force participation and employment‐population ratios. (JEL J68, K31, O43)     

RATINGS AND REVENUES: EVIDENCE FROM MOVIE RATINGS

Ratings and report cards provide a relatively cheap way to influence consumer and producer decisions. We examine the specific case of movie ratings and find that receiving a mature rating (rated R) reduces a movie's box office revenues by 20%. We focus on the specific role of ratings by constructing a mature content index for each movie and compare movies with similar amounts of mature content, but that received different ratings. We also exploit the fact that the movie rating system places specific guidelines on the number of F‐words that are allowed at each content rating. (JEL D0, L82)     

THE DETERMINANTS OF ECONOMIC FREEDOM: A SURVEY

A large literature has found positive associations between economic freedom and income, growth, and a variety of other desirable outcomes. This paper surveys the literature that seeks to explain the causes of economic freedom. Some of the most consistent findings in this literature are that current levels of economic freedom are strongly correlated with past levels; freer countries have more difficulty continuing to improve their economic freedom; democracy and political freedom are positively associated with economic freedom; and inequality is negatively related. (JEL E02, E14, O17, O43, P1)     

ECONOMIC FREEDOM AND INCOME INEQUALITY REVISITED: EVIDENCE FROM A PANEL ERROR CORRECTION MODEL

We investigate the causal relationship between income inequality and economic freedom using data from U.S. states over the period 1981 to 2004 within a panel error correction model framework. The results indicate bidirectional causality between income inequality and economic freedom in both the short and the long run. These results suggest that high income inequality may cause states to implement redistributive policies causing economic freedom to decline. As economic freedom declines, income inequality rises even more. In other words, it is quite possible for a state to get caught in a vicious circle of high income inequality and heavy redistribution. (JEL D63, H11)     

ECONOMIC FREEDOM VERSUS POLITICAL FREEDOM: CROSS‐COUNTRY INFLUENCES ON CORRUPTION*

Using a well‐known index of corruption, this paper examines the determinants of corruption for a large sample of countries. Specifically, the present study brings empirical evidence to bear on the question of whether economic freedom or political freedom serves as a deterrent to corrupt activity. In particular, does greater economic freedom or greater political freedom yield a more ‘clean’ society? Our results show that greater economic freedom seems to matter more in this regard. Examining different components of economic freedom, we find that not all these components are equally effective in reducing corruption. For instance, monetary policy seems to have a stronger influence on the level of corrupt activity in a country than fiscal policy. Robustness of these findings is checked and policy implications are discussed.     

POLITICAL AND ECONOMIC FREEDOM, FISCAL POLICY, AND GROWTH NEXUS: SOME EMPIRICAL RESULTS FOR FIJI

This article presents an empirical analysis of the relationship between political and civil liberty, economic freedom, and growth for Fiji. Fiji's experience of two military coups in 1987, the delay to resolve the agricultural land lease issues, and the implementation of the 1990 Constitution have been major setbacks in terms of Fiji's nondemocratic political environment and uncertain economic policies, a decline in the private investment and exports, and an exodus of skilled labor. This experience severely damaged the growth prospects whereby unstable sociopolitical institutions undermined the importance of economic freedom and civil liberties of its citizens and foreign investors. Empirical results presented here support the view that democratic values and economic freedom are significant for growth. A statistical test for the endogeneity of democracy variable rejects the null, thus the reverse causality, so democratic environment and economic freedom lead to higher economic growth.     

经济自由及其变动的增长效应-来自跨国经济增长面板数据的再检视

经济自由是市场经济的基础,是社会基础设施(Social Infra-structure)的核心内涵。经济自由的提升有利于提高存量资本的生产配置效率,并对国内外投资给出积极信号,推动经济增长。本文在新古典经济增长理论框架下,研究各国社会基础设施发展水平的不同及其转型动态,用近百个国家的增长面板数据验证经济自由水平及其提升的增长效应。此外,本文还用动态面板数据的GMM估计方法检验发现,经济自由是经济增长的Granger原因,而后者不是前者的Granger原因。该结论对发展中国家的经济发展政策具有指导意义。     

ECONOMIC FREEDOM,SPORT POLICY,AND INDIVIDUAL PARTICIPATION IN PHYSICAL ACTIVITY: AN INTERNATIONAL COMPARISON

Many countries promote participation in physical activity among its citizens. We undertake an international comparative analysis of participation using data from 34 countries in the 2007 International Social Survey Programme Leisure Time and Sports module, augmented with country‐specific characteristics capturing economic freedom and national sport policy. Gross domestic product per capita and economic freedom are associated with higher physical activity participation; past success of the national team in the Olympics is associated with lower participation, but hosting sports mega‐events is associated with higher participation. Our findings indicate that participation in sport and physical activity falls with age and rises with education and income. (JEL H59, I12, I18, J22, L83)     

GROWTH,INEQUALITY, AND ECONOMIC FREEDOM: EVIDENCE FROM THE U.S. STATES

This article returns to the discussion of how income inequality affects economic growth. The main argument of the article is that economic freedom is likely to mediate the association between inequality and growth. In a panel of 300 observations from six 5‐year periods across the 50 U.S. states, I employ five different measures of inequality. The results show that across measures, the growth effects of inequality turn more positive with more economic freedom. The moderating effects are mainly driven by measures of public sector consumption. (JEL O11, O38, O43, P48)     

ECONOMIC FREEDOM AND INCOME LEVELS ACROSS U.S. STATES: A SPATIAL PANEL DATA ANALYSIS

There is a large literature estimating the effect of economic freedom on economic growth or income levels. Most studies examine the relationship between economic freedom and growth or income levels for countries, while a few examine the relationship for U.S. states. Absent in the state‐level literature is consideration of the presence of spatial spillovers affecting the freedom‐income relationship. Neglecting to account for spatial autocorrelation can bias estimation results and therefore inferences drawn. We find evidence of a spatial pattern in real per‐capita gross state product (GSP) that affects nonspatial estimates of the freedom‐income relationship. Taking into account the direct and indirect effects of economic freedom on real per‐capita GSP, we find a 10% increase in economic freedom is associated with a 5% increase in real per‐capita GSP. (JEL E02, O47, R11)     

ECONOMIC FREEDOM AND GROWTH IN U.S. STATE‐LEVEL MARKET INCOMES AT THE TOP AND BOTTOM

This paper investigates the relationship between economic freedom and income growth and inequality across U.S. states over the period 1979–2011. The focus is on market income at the top and bottom of the income distribution. Results show that increases in overall freedom are associated with average income growth. When viewed separately, an increase in overall freedom is associated with larger income growth rates for income earners in the bottom 90% relative to the top 10%. Interestingly, results show that increases in overall economic freedom are related to larger relative growth rates for the top 10% incomes within high‐income states and larger relative growth rates for the bottom 90% incomes within low‐income states. Top‐to‐bottom income ratio regressions suggest a negative and statistically significant relationship between economic freedom and income inequality. (JEL D63, P16, R11)     

SLAVERY,FREEDOM, AND SEN

Amartya Sen's Development as Freedom argues that the ability to make choices is fundamental to economic development, and that the evaluation of outcomes can provide misleading answers. He uses the example of the high material consumption of US slaves relative to some free whites to illustrate this contrast. This paper discusses some of the implications of such comparisons and the problem of evaluating what might be regarded as favorable outcomes which come from unfavorable institutions (e.g., slavery). It appears that all good things do not necessarily go together. The past relation of enslavement to the need for subsistence is discussed. Differences in gender roles under slavery and after emancipation are also examined.     

SEN ON FREEDOM AND GENDER JUSTICE

Abstract

This comment on the special double issue of Feminist Economics on Amartya Sen's work discusses a number of themes and evaluates certain criticisms and claims in the volume. Sen's work involves a complex differentiation of distinct aspects of freedom. This differentiation is relevant to a number of criticisms. It is particularly helpful in evaluating various claims about Sen's focus on and the adequacy of his account of freedom. The article also considers claims about Sen's neglect of issues relating to interdependence and agency. To the degree that it is argued that some of these claims and criticisms can be addressed within Sen's conceptual framework, this article constitutes a qualified defense of his work. However, it does not claim that Sen's framework addresses all the criticisms that are leveled at it in the volume. Possible themes for future research are also briefly discussed.