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Decomposed Effects of Democracy on Economic Freedom

Author

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  • Lundström, Susanna

    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

Abstract

Many previous empirical studies conclude that democracy increases economic freedom. However, these studies use highly aggregated indices of economic freedom, which eliminate interesting information and obstruct policy conclusions. The purpose of this study is to empirically study how different categories of economic freedom are affected by democracy in developing countries. There seems to be a positive effect of democracy on the categories Government Operations and Regulations and Restraints on International Exchange, but for the categories Money and Inflation and Takings and Discriminatory Taxation there is no effect. The robustness to extreme points and the model specification is tested.

Suggested Citation

  • Lundström, Susanna, 2002. "Decomposed Effects of Democracy on Economic Freedom," Working Papers in Economics 74, University of Gothenburg, Department of Economics.
  • Handle: RePEc:hhs:gunwpe:0074
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    File URL: http://hdl.handle.net/2077/2671
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    References listed on IDEAS

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    Cited by:

    1. Madeeha Gohar Qureshi & Eatzaz Ahmed, 2012. "The Inter-linkages between Democracy and Per Capita GDP Growth: A Cross Country Analysis," PIDE-Working Papers 2012:85, Pakistan Institute of Development Economics.

    More about this item

    Keywords

    democracy; economic freedom; decomposition;

    JEL classification:

    • P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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