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

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  • Leandro Prados de la Escosura

    (Universidad Carlos III, London School of Economics, CEPR)

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

  • Leandro Prados de la Escosura, 2014. "Economic Freedom in the Long Run: Evidence from OECD Countries (1850-2007)," Working Papers 0054, European Historical Economics Society (EHES).
    • Handle: RePEc:hes:wpaper:0054
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. 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
    2. OECD countries are currently experiencing their highest levels of economic freedom in modern history
      by ? in USAPP on 2014-07-22 15:14:00
    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. 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

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    Cited by:

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    3. Prados de la Escosura, Leandro, 2023. "Economic freedom in retrospect," IFCS - Working Papers in Economic History.WH 37433, Universidad Carlos III de Madrid. Instituto Figuerola.
    4. Kufenko, Vadim & Geloso, Vincent, 2021. "Who are the champions? Inequality, economic freedom and the Olympics," Journal of Institutional Economics, Cambridge University Press, vol. 17(3), pages 411-427, June.
    5. António Henriques & Nuno Palma, 2023. "Comparative European Institutions and the Little Divergence, 1385–1800," Journal of Economic Growth, Springer, vol. 28(2), pages 259-294, June.
    6. Jamie Bologna & Joshua C. Hall, 2014. "Economic Freedom Research: Some Comments and Suggestions," Working Papers 14-23, Department of Economics, West Virginia University.
    7. Vincent Geloso & Kelly Hyde & Ilia Murtazashvili, 2022. "Pandemics, economic freedom, and institutional trade-offs," European Journal of Law and Economics, Springer, vol. 54(1), pages 37-61, August.
    8. Mariya Aleksynska & Sandrine Cazes, 2016. "Composite indicators of labour market regulations in a comparative perspective," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-33, December.
    9. Judit Kapás & Pál Czeglédi, 2017. "Institutions and policies of economic freedom: different effects on income and growth," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 34(2), pages 259-282, August.
    10. Pierre L. Siklos, 2022. "Did the great influenza of 1918–1920 trigger a reversal of the first era of globalization?," International Economics and Economic Policy, Springer, vol. 19(3), pages 459-490, July.
    11. Niklas Elert & Dan Johansson & Mikael Stenkula & Niklas Wykman, 2023. "The evolution of owner-entrepreneurs’ taxation: five tax regimes over a 160-year period," Journal of Evolutionary Economics, Springer, vol. 33(2), pages 517-540, April.
    12. Plehwe, Dieter, 2021. "The Development of Neoliberal Measures of Competitiveness," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 155-181.
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    More about this item

    Keywords

    Negative Freedom; Economic Liberty; OECD;
    All these keywords.

    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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