IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

What drives liberal policies in developing countries?

  • Vatcharin Sirimaneetham

    ()

This paper investigates why governments in some developing countries have adopted more liberal policies than others. To construct a composite policy index, the paper applies a robust principal components analysis to Washington Consensus policy variables. The paper shows that income growth is higher in countries with more liberal policies. Using a Bayesian approach which addresses the model uncertainty problem, this study finds that government policies are more liberal in countries which possess right-wing or centrist governments, have greater political stability, and are former Spanish colonies. In contrast, countries which are less ethnically diverse, are former French colonies, and have a military leader tend to implement less liberal policies.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.efm.bris.ac.uk/economics/working_papers/pdffiles/dp06587.pdf
Download Restriction: no

Paper provided by Department of Economics, University of Bristol, UK in its series Bristol Economics Discussion Papers with number 06/587.

as
in new window

Length: 61 pages
Date of creation: Jun 2006
Date of revision:
Handle: RePEc:bri:uobdis:06/587
Contact details of provider: Postal: 8 Woodland Road, Bristol, BS8 1TN
Phone: 0117 928 8415
Fax: 0117 928 8577
Web page: http://www.efm.bris.ac.uk/
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Dollar, David & Kraay, Aart, 2002. " Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September.
  2. de Haan, Jakob, 2003. "Economic freedom: editor's introduction," European Journal of Political Economy, Elsevier, vol. 19(3), pages 395-403, September.
  3. L. Alan Winters & Neil McCulloch & Andrew McKay, 2004. "Trade Liberalization and Poverty: The Evidence So Far," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 72-115, March.
  4. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," Journal of Law, Economics and Organization, Oxford University Press, vol. 15(1), pages 222-79, April.
  5. John W. Dawson, 2006. "Regulation, Investment, and Growth across Countries," Cato Journal, Cato Journal, Cato Institute, vol. 26(3), pages 489-509, Fall.
  6. Jakob de Haan & Susanna Lundstroem & Jan-Egbert Sturm, 2005. "Market oriented institutions and policies and economic growth: A critical survey," TWI Research Paper Series 5, Thurgauer Wirtschaftsinstitut, Universit�t Konstanz.
  7. Sirimaneetham, Vatcharin & Temple, Jonathan, 2006. "Macroeconomic Policy and the Distribution of Growth Rates," CEPR Discussion Papers 5642, C.E.P.R. Discussion Papers.
  8. Ugo Panizza, 2001. "Electoral Rules, Political Systems, and Institutional Quality," Economics and Politics, Wiley Blackwell, vol. 13(3), pages 311-342, November.
  9. Paul Collier, 2000. "Ethnicity, Politics and Economic Performance," Economics and Politics, Wiley Blackwell, vol. 12(3), pages 225-245, November.
  10. Keefer, Philip & Knack, Stephen, 2002. " Polarization, Politics and Property Rights: Links between Inequality and Growth," Public Choice, Springer, vol. 111(1-2), pages 127-54, March.
  11. Chang, Roberto & Kaltani, Linda & Loayza, Norman V., 2009. "Openness can be good for growth: The role of policy complementarities," Journal of Development Economics, Elsevier, vol. 90(1), pages 33-49, September.
  12. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, 06.
  13. Heckelman, Jac C. & Stroup, Michael D., 2005. "A comparison of aggregation methods for measures of economic freedom," European Journal of Political Economy, Elsevier, vol. 21(4), pages 953-966, December.
  14. Lars P. Feld & Stefan Voigt, 2003. "Economic Growth and Judicial Independence: Cross Country Evidence Using a New Set of Indicators," CESifo Working Paper Series 906, CESifo Group Munich.
  15. Sudeshna Ghosh Banerjee & Michael C. Munger, 2004. "Move to markets? An empirical analysis of privatization in developing countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(2), pages 213-240.
  16. Gernot Doppelhofer & Ronald I. Miller & Xavier Sala-i-Martin, 2000. "Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach," NBER Working Papers 7750, National Bureau of Economic Research, Inc.
  17. Mudambi, Ram & Navarra, Pietro & Paul, Chris, 2002. " Institutions and Market Reform in Emerging Economies: A Rent Seeking Perspective," Public Choice, Springer, vol. 112(1-2), pages 185-202, July.
  18. Malik, Adeel & Temple, Jonathan R.W., 2009. "The geography of output volatility," Journal of Development Economics, Elsevier, vol. 90(2), pages 163-178, November.
  19. Paul Cook & Yuichiro Uchida, 2003. "Privatisation and economic growth in developing countries," Journal of Development Studies, Taylor & Francis Journals, vol. 39(6), pages 121-154.
  20. Bockstette, Valerie & Chanda, Areendam & Putterman, Louis, 2002. " States and Markets: The Advantage of an Early Start," Journal of Economic Growth, Springer, vol. 7(4), pages 347-69, December.
  21. Bengoa, Marta & Sanchez-Robles, Blanca, 2003. "Foreign direct investment, economic freedom and growth: new evidence from Latin America," European Journal of Political Economy, Elsevier, vol. 19(3), pages 529-545, September.
  22. Witold J. Henisz & Edward D. Mansfield, 2004. "Votes and Vetoes: The Political Determinants of Commercial Openness," William Davidson Institute Working Papers Series 2004-712, William Davidson Institute at the University of Michigan.
  23. Easterly, William & Levine, Ross, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1203-50, November.
  24. Steven B. Caudill & Fernando C. Zanella & Franklin G. Mixon, Jr., 2000. "Is Economic Freedom One Dimensional? A Factor Analysis of Some Common Measures of Economic Freedom," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 25(1), pages 17-40, June.
  25. W. J. Henisz, 2000. "The Institutional Environment for Economic Growth," Economics and Politics, Wiley Blackwell, vol. 12(1), pages 1-31, 03.
  26. de Haan, Jakob & Sturm, Jan-Egbert, 2003. "Does more democracy lead to greater economic freedom? New evidence for developing countries," European Journal of Political Economy, Elsevier, vol. 19(3), pages 547-563, September.
  27. Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment: Updates and Implications," CID Working Papers 42, Center for International Development at Harvard University.
  28. Jessica Seddon Wallack & Alejandro Gaviria & Ugo Panizza & Ernesto Stein, 2003. "Particularism around the World," World Bank Economic Review, World Bank Group, vol. 17(1), pages 133-143, June.
  29. Rajeev K. Goel & Michael A. Nelson, 2005. "Economic Freedom Versus Political Freedom: Cross-Country Influences On Corruption ," Australian Economic Papers, Wiley Blackwell, vol. 44(2), pages 121-133, 06.
  30. Yi Feng & Jacek Kugler & Paul Zak, . "The Politics of Fertility and Economic Development," Claremont Colleges Working Papers 1999-36, Claremont Colleges.
  31. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc.
  32. Chris Doucouliagos & Mehmet Ulubasoglu, 2004. "Institutions and Economic Growth: A Systems Approach," Econometric Society 2004 Australasian Meetings 63, Econometric Society.
  33. Bernhard Boockmann & Axel Dreher, 2002. "The Contribution of the IMF and the World Bank to Economic Freedom," International Finance 0207001, EconWPA.
  34. 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.
  35. MacKinnon, James G. & White, Halbert, 1985. "Some heteroskedasticity-consistent covariance matrix estimators with improved finite sample properties," Journal of Econometrics, Elsevier, vol. 29(3), pages 305-325, September.
  36. Berggren, Niclas & Jordahl, Henrik, 2003. "Does free trade really reduce growth? Further testing using the economic freedom index," Ratio Working Papers 25, The Ratio Institute.
  37. Alberto Alesina & Eliana La Ferrara, 2004. "Ethnic Diversity and Economic Performance," Development Working Papers 193, Centro Studi Luca d\'Agliano, University of Milano.
  38. Alesina, Alberto & Devleeschauwer, Arnaud & Wacziarg, Romain & Kurlat, Sergio & Easterly, William, 2003. "Fractionalization," Scholarly Articles 4553003, Harvard University Department of Economics.
  39. Berggren, Niclas, 2003. "The Benefits of Economic Freedom: A Survey," Ratio Working Papers 4, The Ratio Institute.
  40. Ghosh Banerjee, Sudeshna & Rondinelli, Dennis A., 2003. "Does Foreign Aid Promote Privatization? Empirical Evidence from Developing Countries," World Development, Elsevier, vol. 31(9), pages 1527-1548, September.
  41. Robert E. Baldwin, 2003. "Openness and Growth: What's the Empirical Relationship?," NBER Working Papers 9578, National Bureau of Economic Research, Inc.
  42. Alesina, Alberto & Wacziarg, Romain, 1998. "Openness, country size and government," Journal of Public Economics, Elsevier, vol. 69(3), pages 305-321, September.
  43. Pitlik, Hans & Wirth, Steffen, 2003. "Do crises promote the extent of economic liberalization?: an empirical test," European Journal of Political Economy, Elsevier, vol. 19(3), pages 565-581, September.
  44. Manuel Vega-Gordillo & José L. Ãlvarez-Arce, 2003. "Economic Growth and Freedom: A Causality Study," Cato Journal, Cato Journal, Cato Institute, vol. 23(2), pages 199-215, Fall.
  45. de Mello, Luiz & Sab, Randa, 2002. "Government spending, rights, and civil liberties," International Review of Law and Economics, Elsevier, vol. 22(3), pages 257-276, September.
  46. Eduardo Lora & Mauricio Olivera, 2004. "What makes reforms likely: Political economy determinants of reforms in Latin America," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 99-135, May.
  47. Jeffrey Sachs & Andrew Warner, 1995. "Economic Reform and the Progress of Global Integration," Harvard Institute of Economic Research Working Papers 1733, Harvard - Institute of Economic Research.
  48. Grier, Robin M, 1999. " Colonial Legacies and Economic Growth," Public Choice, Springer, vol. 98(3-4), pages 317-35, March.
  49. Dollar, David & Kraay, Aart, 2001. "Trade, growth, and poverty," Policy Research Working Paper Series 2615, The World Bank.
  50. Bernhard Heitger, 2003. "Property Rights and their Impact on the Wealth of Nations-A Cross-Country Study," Kiel Working Papers 1163, Kiel Institute for the World Economy.
  51. Parikh, Ashok & Stirbu, Corneliu, 2004. "Relationship between Trade Liberalisation, Economic Growth and Trade Balance : An Econometric Investigation," HWWA Discussion Papers 282, Hamburg Institute of International Economics (HWWA).
  52. Ha Yan Lee & Luca Antonio Ricci & Roberto Rigobon, 2004. "Once Again, is Openness Good for Growth?," NBER Working Papers 10749, National Bureau of Economic Research, Inc.
  53. L Alan Winters, 2004. "Trade Liberalisation and Economic Performance: An Overview," Economic Journal, Royal Economic Society, vol. 114(493), pages F4-F21, 02.
  54. kishore gawande & pravin krishna, 2005. "The Political Economy of Trade Policy: Empirical Approaches," International Trade 0503003, EconWPA.
  55. Alesina, Alberto & La Ferrara, Eliana, 2005. "Ethnic Diversity and Economic Performance," Scholarly Articles 4553005, Harvard University Department of Economics.
  56. Bortolotti, Bernardo & Siniscalco, Domenico, 2004. "The Challenges of Privatization: An International Analysis," OUP Catalogue, Oxford University Press, number 9780199249343, March.
  57. Vinaye D. Ancharaz, 2003. "Determinants of Trade Policy Reform in Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 12(3), pages 417-443, September.
  58. Yanikkaya, Halit, 2003. "Trade openness and economic growth: a cross-country empirical investigation," Journal of Development Economics, Elsevier, vol. 72(1), pages 57-89, October.
  59. Djeto Assane & Abbas Grammy, 2003. "Institutional framework and economic development: international evidence," Applied Economics, Taylor & Francis Journals, vol. 35(17), pages 1811-1817.
  60. Graeff, P. & Mehlkop, G., 2003. "The impact of economic freedom on corruption: different patterns for rich and poor countries," European Journal of Political Economy, Elsevier, vol. 19(3), pages 605-620, September.
  61. World Bank, 2004. "World Development Indicators 2004," World Bank Publications, The World Bank, number 13890, September.
  62. N. Gregory Mankiw & David Romer & David N. Weil, 1990. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
  63. Vatcharin Sirimaneetham, 2006. "Explaining policy volatility in developing countries," Bristol Economics Discussion Papers 06/583, Department of Economics, University of Bristol, UK.
  64. Choi, E. Kwan & Harrigan, James, 2003. "Handbook of International Trade," Staff General Research Papers 11375, Iowa State University, Department of Economics.
  65. Roberto Rigobon & Dani Rodrik, 2004. "Rule of Law, Democracy, Openness, and Income: Estimating the Interrelationships," NBER Working Papers 10750, National Bureau of Economic Research, Inc.
  66. Samia Tavares, 2005. "Does Rapid Liberalization Increase Corruption?," Public Economics 0507003, EconWPA, revised 31 Aug 2005.
  67. Amelia U. Santos-Paulino, 2005. "Trade Liberalisation and Economic Performance: Theory and Evidence for Developing Countries," The World Economy, Wiley Blackwell, vol. 28(6), pages 783-821, 06.
  68. Kimlong Chheng, 2005. "How Do Economic Freedom and Investment Affect Economic Growth?," Macroeconomics 0509021, EconWPA.
  69. Romain Wacziarg & Karen Horn Welch, 2008. "Trade Liberalization and Growth: New Evidence," World Bank Economic Review, World Bank Group, vol. 22(2), pages 187-231, June.
  70. Xavier Vanssay & Vincent Hildebrand & Zane Spindler, 2005. "Constitutional Foundations of Economic Freedom: A Time-Series Cross-Section Analysis," Constitutional Political Economy, Springer, vol. 16(4), pages 327-346, December.
  71. Andrew K. Rose, 2002. "Do WTO Members have More Liberal Trade Policy?," NBER Working Papers 9347, National Bureau of Economic Research, Inc.
  72. Stanley Fischer, 2003. "Globalization and Its Challenges," American Economic Review, American Economic Association, vol. 93(2), pages 1-30, May.
  73. Axel Dreher, 2002. "Does Globalization Affect Growth?," Development and Comp Systems 0210004, EconWPA, revised 04 Feb 2003.
  74. Manuel Vega-Gordillo & José Luis Álvarez-Arce, 2005. "Heterogeneity In Economic Freedom: Free Clusters Or Free Countries," Faculty Working Papers 08/05, School of Economics and Business Administration, University of Navarra.
  75. Lundstrom, Susanna, 2005. "The effect of democracy on different categories of economic freedom," European Journal of Political Economy, Elsevier, vol. 21(4), pages 967-980, December.
  76. Andrew Berg & Anne O. Krueger, 2003. "Trade, Growth, and Poverty; A Selective Survey," IMF Working Papers 03/30, International Monetary Fund.
  77. Clague, Christopher & Keefer, Philip & Knack, Stephen & Olson, Mancur, 1999. "Contract Intensive Money," MPRA Paper 25717, University Library of Munich, Germany.
  78. Jonathan Isham & Michael Woolcock & Lant Pritchett & Gwen Busby, 2005. "The Varieties of Resource Experience: Natural Resource Export Structures and the Political Economy of Economic Growth," World Bank Economic Review, World Bank Group, vol. 19(2), pages 141-174.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:bri:uobdis:06/587. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jonathan Temple)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.