Abstract
Among the determinants of economic freedom, the presence of different ethnic groups within a country has sometimes been explored by the empirical literature, without conclusive evidence on the sign of the relation, its drivers, and the conditions under which it holds. This paper offers new evidence by empirically modelling how ethnic fragmentation is related to economic freedom, as measured by the Economic Freedom Index and by each of its numerous areas, components and sub-components. The results provide insights on the components driving the effect and, interestingly, detect notable differences between developed and developing countries.
Highlights
The role of institutions in promoting economic growth is a major field of study for economists since the second half of the twentieth century (North, 1990; Rodrik, 2007)
Indices of economic freedom represent a widely accepted way to measure the quality of the institutions that are relevant for economic growth (Gwartney, 2009; Williamson and Mathers, 2011), at least if we assume a liberal view of economics and the functioning of economies
Institutions, as measured by economic freedom indices, may mediate the effect of ethnic diversity on economic growth; in this regard, the present study aims at inquiring into the effects that ethnic fragmentation has on economic freedom and its different areas, components and sub-components
Summary
The role of institutions in promoting economic growth is a major field of study for economists since the second half of the twentieth century (North, 1990; Rodrik, 2007). Depend on the decisions and policies enacted by the national (and sometimes international) governing bodies Such bodies are not independent of the internal situations of the countries that they rule: as Reilly (2000) highlights, one of the major factors that affect policies is the presence of different ethnic groups within a country. These typically claim the right to protection for their cultural traits and representation in elected bodies; in some cases, ethnic differences result in tensions and conflicts, so hampering economic activity (Alesina and La Ferrara, 2005). Institutions, as measured by economic freedom indices, may mediate the effect of ethnic diversity on economic growth; in this regard, the present study aims at inquiring into the effects that ethnic fragmentation has on economic freedom and its different areas, components and sub-components
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
