Economic freedom, civil liberties, political rights and growth: a causality analysis

Abstract

Several empirical studies have established the relationship between economic freedom, civil liberties and political rights, and economic growth. Nevertheless, few studies analyze the directions of causality. This paper studies the causality relations between the institutional dimensions mentioned above and economic growth, as well as the interrelations between them, using the Granger methodology with panel data for 187 countries and five-yearly observations for the period 1976–2000. In addition, the relations between these freedoms and investment in physical and human capital are examined, to be able to isolate the direct and indirect effects on growth.

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Correspondence to José Aixalá.

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The authors acknowledge the suggestions made by the editor and the reviewers, which have improved this work with respect to its initial version.

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Aixalá, J., Fabro, G. Economic freedom, civil liberties, political rights and growth: a causality analysis. Span Econ Rev 11, 165 (2009). https://doi.org/10.1007/s10108-008-9050-x

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Keywords

  • Economic freedom
  • Civil liberties
  • Political rights
  • Economic growth

JEL Classification

  • O10
  • O17
  • O50