Clusters of economic freedom

Huskinson, Toby; Lawson, Robert A.

doi:10.1080/13504851.2014.909565

Cited by 12 publications

(8 citation statements)

References 5 publications

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“…Our approach here helps to better understand the EFW measure of institutions and its limitations in a manner similar to the recent paper by Huskinson and Lawson (2015).…”

Section: Concluding Discussionmentioning

confidence: 88%

An ordinal ranking of economic institutions

et al. 2015

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We provide the first ranking of countries' economic institutions using an ordinal methodology. Using the five areas of the Fraser Institute's Economic Freedom of the World (EFW) Index, we find that final rankings of a country's institutions are sensitive to the importance-ordering of Area 1 (Size of Government). When Areas 2-5 are in the most important position, we find that there is no significant difference between the EFW rankings and our rankings. When Area 1 is placed in the most important position, however, a number of European countries with large welfare states but good governance do poorly. JEL Codes: E02, 043

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“…Our approach here helps to better understand the EFW measure of institutions and its limitations in a manner similar to the recent paper by Huskinson and Lawson (2015).…”

Section: Concluding Discussionmentioning

confidence: 88%

An ordinal ranking of economic institutions

et al. 2015

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“…The fact that some countries combine a large public sector and high taxes with high levels of economic freedom is increasingly being recognized and discussed (Bergh, 2006; Bergh and Erlingsson, 2009; Horpedahl, 2013; Huskinson and Lawson, 2014; Ott, 2018). In OECD countries, this pattern is the result of a process occurring in the 1980s and 1990s, when several countries with large public sectors implemented reforms that increased the level of economic freedom without substantially shrinking the size of the welfare state.…”

Section: Introductionmentioning

confidence: 99%

Hayekian welfare states: explaining the coexistence of economic freedom and big government

Bergh

2019

Journal of Institutional Economics

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To explain the coexistence of economic freedom and big government, this paper distinguishes between big government in the fiscal sense of requiring high taxes, and big government in the Hayekian sense of requiring knowledge that is difficult to acquire from a central authority. The indicators of government size in measures of economic freedom capture the fiscal size but ignore the Hayekian knowledge problem. Thinking about government size in both the fiscal and Hayekian dimensions suggests the possibility of Hayekian welfare states where trust and state capacity facilitate experimentation and learning, resulting in a public sector that is big in a fiscal sense but not necessarily more vulnerable to the Hayekian knowledge problem. Pensions in Sweden are used as a case to illustrate the empirical relevance of the argument. The new pension system represents big government in a fiscal sense, but by relying on decentralized choice it requires relatively little central knowledge.

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“…The maps in Figure 1 are still largely similar, especially outside Europe, North America, and Africa. As another means of examining the results, we perform a k -means clustering analysis comparable to that found in Huskinson and Lawson (2014), who apply the methodology to the five areas of economic freedom. When they perform the analysis, they find four clusters: two which correspond to very low and low levels of economic freedom, another which they label “liberal market economies” and a final one they label “social market economies.” Social market economies combine large governments with otherwise high economic freedom, whereas liberal market economies have both high economic freedom and small governments.…”

Section: Further Descriptive Analysismentioning

confidence: 99%

Breaking Wagner's Law: Which Countries Have the Most Limited Government?

Murphy

2022

Public Finance Review

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Which countries have the world's smallest and the world's largest governments? One-fifth of the Economic Freedom of the World index is a subindex scoring the size of government for countries across the world. This subindex is inclusive of the three dimensions of government spending, the top marginal tax rate, and the government ownership of the economy. Measured in this manner, the “smallest” governments are, generally, weak or fragile states. This paper recognizes Wagner's law, the empirical regularity that wealthier countries tend to spend more as a percentage of gross domestic product (GDP). It then performs a novel adjustment to the size of government data to account for Wagner's law, re-scores and re-ranks the countries, and explores the results.

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Clusters of economic freedom

Cited by 12 publications

References 5 publications

An ordinal ranking of economic institutions

An ordinal ranking of economic institutions

Hayekian welfare states: explaining the coexistence of economic freedom and big government

Breaking Wagner's Law: Which Countries Have the Most Limited Government?

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