Abstract
Since foreign investments are crucial in developing economy and breaking poverty chain, the majority of developing countries, which suffer from the lack of investment savings in countries, enter the competition in attracting investments. In the competition, they realize that economic freedom has to be improved for investments to come to the economy as well as other freedom level indices. This paper analyzes the key factors needed to better off in order to attract investments, the linkage between foreign capital and the level of freedom of countries investigated in theory and practice, and Azerbaijan’s current economic freedom level and improvements. Sharp decline in oil prices since 2015 that forced government to devaluate the currency twice lead to government reforms in non-oil sector in Azerbaijan. This study also investigates impact of Azerbaijan economic freedom level improved by economic and legislative reforms on economic freedom indices set by World Bank doing business and other organizations.
Highlights
One of the main factors in attracting investments is directly linked to the climate of economic freedom in that country
Economic freedom is measured by four broad categories such as Rule of law, Government size, regulatory efficiency, and market openness
Azerbaijan average score in 10 factors of economic freedom index increased from 30% since 1996 to world average in 2010 and passed to moderately free economy in 2017 according to The Heritage foundation report of 2017
Summary
One of the main factors in attracting investments is directly linked to the climate of economic freedom in that country. The concept of economic freedom within the classical liberal tradition that emphasizes 12 factors and categorized as rule of law (property rights, government integrity, judicial effectiveness), Government size (government spending, tax burden, fiscal health), regulatory efficiency (business freedom, labor freedom, monetary freedom), open markets (trade freedom, investment freedom, financial freedom) for 186 countries and can be graded on a scale of 0–100. Economic freedom is measured by four broad categories such as Rule of law (property rights, judicial effectiveness, and government integrity), Government size (tax burden, government spending, and fiscal health), regulatory efficiency (business freedom, labor freedom, and monetary freedom), and market openness (trade freedom, investment freedom, and financial freedom). The Heritage Foundation’s Index of Economic Freedom uses 22 Doing Business indicators in four areas, including rule of law, government size, regulatory efficiency and market openness. Bribe and corruption (graft index, which reflects times of firms were requested to pay a gift or informal payment when applying for six different public services) as well as perception on fair court were lower than average
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
