Causes and Barriers to Increases in Economic Freedom

Abstract We investigate the causes of increases in economic freedom by examining a cross section of countries from 1990 to 2010 and examining factors that have previously been associated with increases in freedom alongside other factors which have been found to be important for growth. We find that higher initial GNI per capita is associated with larger subsequent increases in economic freedom and countries are less likely to improve their freedom the higher their initial level of freedom, energy exports, and ethnolinguistic fractionalization. When we test subsamples, we find that little explains changes in freedom in countries with high levels of initial freedom, initially high incomes, and that did not receive foreign aid.