Direct and indirect effects of economic and political freedom on economic growth

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Authors: Gema Fabro and Jose Aixala
Date: Dec. 2012
From: Journal of Economic Issues(Vol. 46, Issue 4)
Publisher: Taylor & Francis Group LLC
Document Type: Report
Length: 7,890 words
Lexile Measure: 1430L

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Abstract :

This paper examines the relative impact of economic freedom, civil liberties, and political rights on growth. A system of three simultaneous equations is used to unearth the channels through which these institutional dimensions affect economic growth. These include greater efficiency and enlarged investment in physical and human capital. The sample contains 79 countries and six periods covering the years from 1976 to 2005. The results show that the three dimensions of institutional quality are important for economic growth either through a better allocation of resources or, indirectly, through the stimulation of investment in physical and human capital. Keywords: civil liberties, economic growth, economic freedom, political rights JEL Classification Codes: O10, O17, O50

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Gale Document Number: GALE|A312828876