How Robust Is The Relationship Between Economic Freedom And Economic Growth

Using various indicators for economic freedom, it is shown that increases in economic freedom are robustly related to economic growth. This conclusion holds even if the impact of outlying observations is taken into account. The level of economic freedom is not related to economic growth.

This important book offers a comprehensive defence of classical liberalism against contemporary challenges. It sets out an analytical framework of 'robust political economy' that explores the economic and political problems that arise from the phenomena of imperfect knowledge and imperfect incentives. Using this framework, the book defends the classical liberal focus on markets and the minimal state from the critiques presented by 'market failure' economics and communitarian and egalitarian variants of political theory. Mark Pennington expertly applies the lessons learned from responding to these challenges in the context of contemporary discussions surrounding the welfare state, international development, and environmental protection. Written in an accessible style, this authoritative book would be useful for both undergraduate and graduate students of political economy and public policy as a standard reference work for classical liberal analysis and a defence of its normative prescriptions. The book's distinctive approach will ensure that academic practitioners of economics and political science, political theory and public policy will also find its controversial conclusions insightful. Contents: 1. Introduction: Classical Liberalism and Robust Political Economy; Part I: Challenges to Classical Liberalism; 2. Market Failures 'Old' and 'New': The Challenge of Neo-Classical Economics; 3. Exit, Voice and Communicative Rationality: The Challenge of Communitarianism I; 4. Exit, Trust and Social Capital: The Challenge of Communitarianism II; 5. Equality and Social Justice: The Challenge of Egalitarianism; Part II: Towards the Minimal State; 6. Poverty Relief and Public Services: Welfare State or Minimal State?; 7. Institutions and International Development: Global Governance or the Minimal State?; 8. Environmental Protection: Green Leviathan or the Minimal State?; 9. Conclusion; Bibliography; Index

The purpose of this research note is to re-examine the link between economic freedom and economic growth because the connection has been massively over played in the past 35 years, using a sample of 175 countries. Answering this question has important socioeconomic policy implications as economic freedom as a means of fostering higher economic growth has been high on the priority list of leading countries like the UK and US. Indeed, virtually every country in the world has embarked on this agenda either voluntarily or at the behest of the World Bank and IMF through Washington Consensus. A small, yet significant association is found in line with recent studies. Despite this, the World Bank and the IMF have built their agenda on a strong assumed association. From the analysis in this research note, we need to be careful about over extrapolating the link between economic freedom and economic growth. Although the analysis is rudimentary yet robust in this research note, it appears that no such consideration was undertaken by the IMF and World Bank before Washington Consensus bulldozed its way around the developing parts of the globe, leading to major economic and financial disruption. Arguably this disarray continues today due to the ideological nature that economic freedom has morphed into.

By the winner of the 1988 Nobel Prize in Economics, an essential and paradigm-altering framework for understanding economic development--for both rich and poor--in the twenty-first century. Freedom, Sen argues, is both the end and most efficient means of sustaining economic life and the key to securing the general welfare of the world's entire population. Releasing the idea of individual freedom from association with any particular historical, intellectual, political, or religious tradition, Sen clearly demonstrates its current applicability and possibilities. In the new global economy, where, despite unprecedented increases in overall opulence, the contemporary world denies elementary freedoms to vast numbers--perhaps even the majority of people--he concludes, it is still possible to practically and optimistically restain a sense of social accountability. Development as Freedom is essential reading.

This seminal Handbook provides a comprehensive overview of contemporary research on economic freedom, using multidisciplinary methods to assess studies of the determinants and consequences of market-oriented institutions and policies. Niclas Berggren brings together world-leading experts in their respective fields to explore the notion of economic freedom in the history of economic thought, to present measures of economic freedom and to provide overviews of the latest empirical research.

What are the keys to good economic policy? George P. Shultz and John B. Taylor draw from their several decades of experience at the forefront of national economic policy making to show how market fundamentals beat politically popular government interventions—be they from Democrats or Republicans—as a recipe for success. Choose Economic Freedom reconstructs debates from the 1960s and 1970s about the use of wage and price controls as tools of policy, showing how brilliant economists can hold diametrically opposed views about the wisdom of using government intervention to spur the economy. Speeches and documents from the era include a recently unearthed memo from Arthur Burns, Federal Reserve chair, in 1971, in which he argues in favor of controls. Under Burns's guidance and in the face of stubborn inflation, Nixon introduced wage and price guidelines and freezes. But over the long run, these became a drag on the economy and ultimately failed. It wasn't until the Reagan administration that these controls were reversed, resulting in a vibrant economy. The words of iconic economist Milton Friedman—whose "free to choose" ethos inspired the free-market revolution of the Reagan era—along with lessons Shultz and Taylor learned from the front lines, demonstrate that tried-and-true economic policy works.

Derives an indicator for economic freedom based on personal choice, protection of private property, and freedom of exchange. Considers levels and trends in economic freedom, and their correlation with economic growth in 103 countries.