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Academic Freedom, Institutions and Productivity

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The issue of what explains differences in the wealth of nations is one of the most classic in economics. We propose de facto academic freedom as an explanatory variable. The main idea is that such freedom allows for the development of new useful knowledge through research unconstrained by powerholders in business and politics. Using a new global panel-data set, encompassing up to 127 countries over the period 1960–2015, we show that there is indeed a positive relationship between de facto academic freedom and both labor and total-factor productivity growth. However, this effect only appears as long as the quality of the legal system is sufficiently high. We suggest that this is because such institutional quality offers protection that stimulates entrepreneurs to make use of the new knowledge produced in academia in innovative activities, which in turn benefits productivity growth.

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  • Berggren, Niclas & Bjørnskov, Christian, 2021. "Academic Freedom, Institutions and Productivity," Working Paper Series 1405, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:1405
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    Cited by:

    1. Salvatore Capasso & Rajeev K. Goel & James W. Saunoris, 2023. "The nexus between corruption and academic freedom: An international investigation of the underlying linkages," Contemporary Economic Policy, Western Economic Association International, vol. 41(3), pages 513-531, July.
    2. Janika Spannagel & Katrin Kinzelbach, 2023. "The Academic Freedom Index and Its indicators: Introduction to new global time-series V-Dem data," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(5), pages 3969-3989, October.
    3. Davut Emrah Ayan & Laurel L. Haak & Donna K. Ginther, 2023. "How many people in the world do research and development?," Global Policy, London School of Economics and Political Science, vol. 14(2), pages 270-287, May.

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    More about this item

    Keywords

    Institutions; Academic freedom; Freedom of speech; Productivity; Growth;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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