Do societies with freer markets really become less homicidal over time? New evidence from 131 developed and developing societies, 2000–2021

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Research into the social correlates of free-market institutions has significantly expanded during the past 15 years with the widespread use of indexes of economic freedom. One crucial issue, however, has been only very sparsely probed: the relationship between free markets and homicidal violence. The few studies that do exist are mostly beset by one or multiple serious methodological weaknesses, such as reliance on single cross-sections, failure to disaggregate the index of economic freedom, not investigating its potentially heterogenous effects in developed and developing societies, ignoring possible endogeneity, etc. The present study addresses these issues in a panel sample of 131 developed and developing countries between 2000 and 2021. A key novel finding, robust to dynamic panel estimation techniques addressing endogeneity concerns, is that the aggregate economic freedom index has a negative over-time relationship with homicide in developing countries. Conversely, it exhibits a positive relationship in the developed world, exacerbating homicide rates.