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Economic Freedom in the Long Run: Evidence from OECD Countries (1850-2007)

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  • Prados de la Escosura, Leandro

Abstract

This paper presents historical indices for the main dimensions of economic freedom and an aggregate index for nowadays developed countries -(pre-1994) OECD, for short-. Economic liberty expanded over the last one-and-a-half centuries, reaching two thirds of its maximum possible. Its evolution has been, however, far from linear. After a substantial improvement since mid-nineteenth century, World War I brought a major setback. The post-war recovery up to 1929 was followed by a dramatic decline in the 1930s and significant progress took place during the Golden Age but fell short from the pre-World War I peak. A steady expansion since the early 1980s has resulted in the highest levels of economic liberty of the last two centuries. Each main dimension of economic freedom exhibited a distinctive trend and its contribution to the aggregate index varied over time. Nonetheless, improved property rights provided the main contribution to the long-run advancement of economic liberty.

Suggested Citation

  • Prados de la Escosura, Leandro, 2014. "Economic Freedom in the Long Run: Evidence from OECD Countries (1850-2007)," IFCS - Working Papers in Economic History.WH wp14-02, Universidad Carlos III de Madrid. Instituto Figuerola.
    • Handle: RePEc:cte:whrepe:wp14-02
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    References listed on IDEAS

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    1. Dennis P. Quinn & A. Maria Toyoda, 2008. "Does Capital Account Liberalization Lead to Growth?," The Review of Financial Studies, Society for Financial Studies, vol. 21(3), pages 1403-1449, May.
    2. Sophia Lazaretou, 2009. "Money supply and Greek history monetary statistics: definition, construction, sources and data," Working Papers 105, Bank of Greece.
    3. Thomas, Ryland & Hills, Sally & Dimsdale, Nicholas, 2010. "The UK recession in context — what do three centuries of data tell us?," Bank of England Quarterly Bulletin, Bank of England, vol. 50(4), pages 277-291.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. OECD countries are currently experiencing their highest levels of economic freedom in modern history
      by ? in USAPP on 2014-07-22 15:14:00
    2. OECD countries are currently experiencing their highest levels of economic freedom in modern history
      by Blog Admin in British Politics and Policy at LSE on 2014-07-19 16:00:55
    3. OECD countries are currently experiencing their highest levels of economic freedom in modern history
      by Blog Admin in EUROPP European Politics and Policy on 2014-07-16 19:15:35
    4. La libertad económica en el largo plazo: Evidencia de los países de la OCDE
      by ? in Nada es Gratis on 2014-04-21 10:00:00

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    Cited by:

    1. Jamie Bologna & Joshua C. Hall, 2014. "Economic Freedom Research: Some Comments and Suggestions," Working Papers 14-23, Department of Economics, West Virginia University.

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    More about this item

    Keywords

    Negative freedom;

    JEL classification:

    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • P10 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - General

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