Causes and Barriers to Increases in Economic Freedom

Abstract

We investigate the causes of increases in economic freedom by examining a cross-section of countries from 1990-2010. We find that higher initial GNI per capita is associated with larger subsequent increases in economic freedom. We also found countries are less likely to improve their freedom the higher that their initial levels of freedom and energy exports are. In some causes inflationary crises and ethnolingusitic fractionalization were also correlated with smaller increases in economic freedom. These impacts were generally more important in countries with lower initial levels of economic freedom and in preventing countries from making above average increases in economic freedom.