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On the relevance of freedom and entitlement in development : new empirical evidence (1975-2007)

Author

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  • Chauffour, Jean-Pierre
Abstract
Reviewing the economic performance -- good and bad -- of more than 100 countries over the past 30 years, this paper finds new empirical evidence supporting the idea that economic freedom and civil and political liberties are the root causes of why some countries achieve and sustain better economic outcomes. For instance, a one unit change in the initial level of economic freedom between two countries (on a scale of 1 to 10) is associated with an almost 1 percentage point differential in their average long-run economic growth rates. In the case of civil and political liberties, the long-term effect is also positive and significant with a differential of 0.3 percentage point. In addition to the initial conditions, the expansion of freedom conditions over time (economic, civil, and political) also positively influences long-run economic growth. In contrast, no evidence was found that the initial level of entitlement rights or their change over time had any significant effects on long-term per capita income, except for a negative effect in some specifications of the model. These results tend to support earlier findings that beyond core functions of government responsibility -- including the protection of liberty itself -- the expansion of the state to provide for various entitlements, including so-called economic, social, and cultural rights, may not make people richer in the long run and may even make them poorer.

Suggested Citation

  • Chauffour, Jean-Pierre, 2011. "On the relevance of freedom and entitlement in development : new empirical evidence (1975-2007)," Policy Research Working Paper Series 5660, The World Bank.
    • Handle: RePEc:wbk:wbrwps:5660
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    References listed on IDEAS

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    Cited by:

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    2. Klachkova, Olga A. (Клачкова, Ольга), 2017. "Modelling the Impact of Inflation on Economic Growth for Countries with Different Levels of Economic Freedom [Влияние Инфляции На Экономический Рост В Зависимости От Уровня Экономической Свободы Ст," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 5, pages 22-41, October.
    3. Kiliç, Cuneyt & Arica, Feyza, 2014. "Economic Freedom, Inflation Rate and their Impact on Economic Growth: A Panel Data Analysis," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 160-176, March.
    4. Ceyhun Haydaroglu, 2015. "The Relationship between Property Rights and Economic Growth: an Analysis of OECD and EU Countries," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 4, pages 217-239, December.
    5. Pál Czeglédi, 2014. "The theory of interventionism as an Austrian theory of slowdowns," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 27(4), pages 419-449, December.
    6. Olalekan C. Okunlola & Olumide A. Ayetigbo, 2022. "Economic Freedom and Human Development in ECOWAS: Does Political-Institutional Strength Play a Role?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(3), pages 1751-1785, September.

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