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Economic Freedom and Government: A Conceptual Framework

Listed author(s):
  • Kapas Judit

    (University of Debrecen)

  • Czegledi Pal

    (University of Debrecen)

The aim of this paper is to contribute to the development of a theory of economic freedom. In this endeavor, we build our framework on the Hayekian notion of freedom (Hayek, 1960) because it explicitly embodies the obvious link between freedom and the state: freedom is an absence of state coercion except for that which enforces abstract, general rules known beforehand. We derive two propositions from this Hayekian thesis and elaborate on them, leading to a categorization of government actions from the viewpoint of economic freedom in which the criterion against which coercive governmental actions must be evaluated is the rule of law, meaning a governments reliance on general, abstract rules. As an implication, our framework allows us to argue for the imperative differentiation between efficiency and economic freedom as two separate criteria against which government actions can and must be evaluated. We also show that our framework may help explain the process through which economic freedom enhances growth.

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Article provided by De Gruyter in its journal Journal des Economistes et des Etudes Humaines.

Volume (Year): 16 (2010)
Issue (Month): 1 (October)
Pages: 1-26

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Handle: RePEc:bpj:jeehcn:v:16:y:2010:i:1:n:1
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  1. Dawson, John W., 2003. "Causality in the freedom-growth relationship," European Journal of Political Economy, Elsevier, vol. 19(3), pages 479-495, September.
  2. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
  3. Carlsson, Fredrik & Lundstrom, Susanna, 2002. "Economic Freedom and Growth: Decomposing the Effects," Public Choice, Springer, vol. 112(3-4), pages 335-344, September.
  4. Hugo Faria & Hugo Montesinos, 2009. "Does economic freedom cause prosperity? An IV approach," Public Choice, Springer, vol. 141(1), pages 103-127, October.
  5. Benson, Bruce L, 1999. "An Economic Theory of the Evolution of Governance and the Emergence of the State," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 12(2), pages 131-160, November.
  6. de Haan, Jakob & Sturm, Jan-Egbert, 2000. "On the relationship between economic freedom and economic growth," European Journal of Political Economy, Elsevier, vol. 16(2), pages 215-241, June.
  7. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
  8. Peter Leeson, 2007. "Efficient anarchy," Public Choice, Springer, vol. 130(1), pages 41-53, January.
  9. James D . Gwartney & Randall G . Holcombe & Robert A . Lawson, 2006. "Institutions and the Impact of Investment on Growth," Kyklos, Wiley Blackwell, vol. 59(2), pages 255-273, 05.
  10. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
  11. Yoram Barzel, 2000. "Property rights and the evolution of the state," Economics of Governance, Springer, vol. 1(1), pages 25-51, 03.
  12. Weingast, Barry R, 1995. "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development," Journal of Law, Economics and Organization, Oxford University Press, vol. 11(1), pages 1-31, April.
  13. Knack, Stephen & Keefer, Philip, 1995. "Institutions and Economic Performance: Cross-Country Tests Using Alternative Institutional Indicators," MPRA Paper 23118, University Library of Munich, Germany.
  14. Bruce L. Benson, 1998. "Economic Freedom and the Evolution of Law," Cato Journal, Cato Journal, Cato Institute, vol. 18(2), pages 209-232, Fall.
  15. repec:cto:journl:v:18:y:1998:i:2:p: is not listed on IDEAS
  16. Christian Bjørnskov & Nicolai Foss, 2008. "Economic freedom and entrepreneurial activity: Some cross-country evidence," Public Choice, Springer, vol. 134(3), pages 307-328, March.
  17. North, Douglass C. & Weingast, Barry R., 1989. "Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England," The Journal of Economic History, Cambridge University Press, vol. 49(04), pages 803-832, December.
  18. Walter Block, 2006. "Paul Craig Roberts on empirical measures of economic freedom: a rejoinder," International Journal of Social Economics, Emerald Group Publishing, vol. 33(7), pages 481-490, July.
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