An ordinal ranking of economic institutions

Beaulier, Scott A.; Elder, Robert S.; Han, Cheryl; Hall, Joshua C.

doi:10.1080/00036846.2015.1122736

Cited by 8 publications

(3 citation statements)

References 22 publications

(10 reference statements)

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“…Decreases in the size of government (higher scores in Size of Government) have no statistically significant direct, indirect, or total effect on state income levels. This finding is consistent with a literature showing that government size, while a component of economic freedom, is different than the other areas of economic freedom because it can reflect both support and hindrance of other freedoms or productive activity (Beaulier et al ).…”

Section: Resultssupporting

confidence: 92%

Economic Freedom and Income Levels Across U.S. States: A Spatial Panel Data Analysis

Hall

Lacombe

Shaughnessy

2018

Contemporary Economic Policy

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There is a large literature estimating the effect of economic freedom on economic growth or income levels. Most studies examine the relationship between economic freedom and growth or income levels for countries, while a few examine the relationship for U.S. states. Absent in the state‐level literature is consideration of the presence of spatial spillovers affecting the freedom‐income relationship. Neglecting to account for spatial autocorrelation can bias estimation results and therefore inferences drawn. We find evidence of a spatial pattern in real per‐capita gross state product (GSP) that affects nonspatial estimates of the freedom‐income relationship. Taking into account the direct and indirect effects of economic freedom on real per‐capita GSP, we find a 10% increase in economic freedom is associated with a 5% increase in real per‐capita GSP. (JEL E02, O47, R11)

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Section: Resultssupporting

confidence: 92%

Economic Freedom and Income Levels Across U.S. States: A Spatial Panel Data Analysis

Hall

Lacombe

Shaughnessy

2018

Contemporary Economic Policy

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“…Economic freedom is certainly multi-dimensional and more than just bureaucracy(Bologna and Hall, 2014;Gwartney et al 2016). However, the majority of economic freedom areas (property rights, rule of law, freedom to trade, regulations) are highly correlated(Beaulier et al 2016).…”

mentioning

confidence: 99%

The Efficient Corruption Hypothesis and the Dynamics Between Economic Freedom, Corruption, and National Income

Hall¹,

Levendis²,

Scarcioffolo³

2020

The Journal of Developing Areas

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Income, economic freedom, and corruption interact in complex ways as all three variables are arguably endogenous. We explicitly model this endogeneity using a panel VAR framework. The pVAR models we estimate are able to explicitly model this endogeneity better than the single-equation panel data models previously used in the literature. Using data on corruption and income from the World Bank and economic freedom from the Fraser Institute, we provide evidence that corruption and the absence of economic freedom have a negative effect on national income.

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“…Heckelman and Stroup (2002) have used similar methodology to construct an alternative index, using weights representing relevance to growth. On the other hand, Beaulier et al (2016) have used an ordinal ranking, based on ordering the components of EFW according to their respective importance, to construct an alternative index for ranking the institutions of countries.…”

Section: Resultsmentioning

confidence: 99%

Studies on Entrepreneurship, Regulation and Economic Freedom

Ghosh¹

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Studies on Entrepreneurship, Regulation and Economic Freedom Sriparna Ghosh This dissertation is a collection of empirical essays studying the effects of institutional qualities on firm dynamics and latent entrepreneurship. After providing an overview of the dissertation in Chapter 1, in Chapter 2 I analyze the effect of industry level federal regulations on firm decisions to exit the market. The idea is to test whether stricter regulation results in reduced competitiveness for smaller firms relative to larger firms. Using data from the Kauffman Firm Survey and RegData, I find that the effect of regulation on firm exit varies based on firm size. My findings are in congruence with the predictions of regulator models where regulation acts as a fixed cost on all firms, leading to a reduction in small firms relative to large firms. In Chapter 3, I look at the effect of economic freedom on entrepreneurial intention. While a number of studies have looked at the effect of economic freedom on entrepreneurship, none have looked at how economic freedom influences the intention to engage in entrepreneurship. Using panel data on a wide variety of countries, I investigate the effects of economic freedom, especially regulation, on entrepreneurial intention. My findings suggest that stricter credit market regulation reduces entrepreneurial intention whereas more stringent labor regulations restricts job availability and thereby encourages more people to take up entrepreneurship as a career choice. Chapter 4 is an addition to the literature on economic freedom and economic growth. It has been well-established that economic freedom is associated with good economic outcomes. Economic freedom, however, is comprised of numerous dimensions. The marginal benefit to improving policy in one area can be expected to depend on the amount of freedom in the other dimensions. Thus, which policy improvement is most impactful depends on the entire menu of current policies and, therefore, differ between states. In Chapter 4, Bryan McCannon and I explore how economic freedom measurements can be used to guide policy. We propose a method for creating a growth-enhancing economic freedom index, which allows for nonlinearities and interaction effects between the components to economic freedom. We use this method to illustrate that U.S. states differ in which policy area generates the greatest gains. To validate our method, we apply our index to state bond markets. If our measurement is useful, then it should correlate with bond ratings. Consistent with this hypothesis, we find that state bond ratings are strongly correlated with our growth-enhancing economic freedom index. iii Dedication This dissertation is dedicated to my parents, Dr. Apurba Kumar Ghosh and Ashoka Ghosh and my grandmother Shefali Ghosh, who are my pillars of support.

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An ordinal ranking of economic institutions

Cited by 8 publications

References 22 publications

Economic Freedom and Income Levels Across U.S. States: A Spatial Panel Data Analysis

Economic Freedom and Income Levels Across U.S. States: A Spatial Panel Data Analysis

The Efficient Corruption Hypothesis and the Dynamics Between Economic Freedom, Corruption, and National Income

Studies on Entrepreneurship, Regulation and Economic Freedom

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