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The Impact of Economic Freedom on Economic Growth in the SADC: An Individual Component Analysis


  • Vsevolod I. Gorlach and Pierre Le Roux


The SADC is attempting to achieve development and economic growth. This paper investigates the relationship between economic freedom – in aggregate and on an individual component basis – on economic growth in the SADC. The annual data for 13 SADC countries from 2000 to 2009 are used to construct a generalised method of moments, dynamic panel-data model. When cross-sectional dependence of the error term, individual- and time-specific effects are controlled, economic freedom and GDP per capita are positively related and freedom Granger-causes growth. All five individual components are highly significant and are positively related to growth; however, the magnitude of the elasticity parameters varies. The causality among the individual freedom components indicates that linkages exist between certain of these components.

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  • Vsevolod I. Gorlach and Pierre Le Roux, 2013. "The Impact of Economic Freedom on Economic Growth in the SADC: An Individual Component Analysis," Working Papers 327, Economic Research Southern Africa.
  • Handle: RePEc:rza:wpaper:327

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    More about this item


    Economic freedom; economic growth; SADC; causality; elasticity;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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