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Economic freedom as driver of growth in transition

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  • Pääkkönen, Jenni

Abstract

This paper reviews the political economy of economic growth in post-communist economies making the transition to free markets, focusing on the role of economic policy and institutions. We test the hypothesis that better institutions, measured in terms of economic freedom, contribute to growth. To begin with, the empirical results from the cross-section of transition economies confirm this hypothesis. Yet the question is deeper than that since there is an interactive effect between economic freedom and investment. The paper concludes that non-linearities are present in the growth model.

Suggested Citation

  • Pääkkönen, Jenni, 2010. "Economic freedom as driver of growth in transition," Economic Systems, Elsevier, vol. 34(4), pages 469-479, December.
  • Handle: RePEc:eee:ecosys:v:34:y:2010:i:4:p:469-479
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    Cited by:

    1. Goel, Rajeev K. & Korhonen, Iikka, 2011. "Exports and cross-national corruption: A disaggregated examination," Economic Systems, Elsevier, vol. 35(1), pages 109-124, March.
    2. Jan Babecky & Tomas Havranek, 2013. "Structural Reforms and Growth in Transition: A Meta-Analysis," William Davidson Institute Working Papers Series wp1057, William Davidson Institute at the University of Michigan.
    3. Yilmaz Bayar, 2016. "Impact of Openness and Economic Freedom on Economic Growth in the Transition Economies of the European Union," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 14(1), pages 7-19.
    4. Bang, James T. & Mitra, Aniruddha, 2011. "Brain drain and institutions of governance: Educational attainment of immigrants to the US 1988-1998," Economic Systems, Elsevier, vol. 35(3), pages 335-354, September.
    5. Webster, A.L., 2013. "Is There Feed-Back Between Economic Freedom and Economic Growth: A Comparative Granger-Causality Test Based On Quartiles," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 13(1), pages 11-24.
    6. repec:agr:journl:v:xxiv:y:2017:i:2(611):p:75-98 is not listed on IDEAS
    7. Law, Siong Hook & Lim, Thong Cheen & Ismail, Normaz Wana, 2013. "Institutions and economic development: A Granger causality analysis of panel data evidence," Economic Systems, Elsevier, vol. 37(4), pages 610-624.

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    Keywords

    Growth Institutions Dynamic GMM;

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