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Political And Economic Freedom, Fiscal Policy, And Growth Nexus: Some Empirical Results For Fiji

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  • Rukmani Gounder

Abstract

This article presents an empirical analysis of the relationship between political and civil liberty, economic freedom, and growth for Fiji. Fiji's experience of two military coups in 1987, the delay to resolve the agricultural land lease issues, and the implementation of the 1990 Constitution have been major setbacks in terms of Fiji's nondemocratic political environment and uncertain economic policies, a decline in the private investment and exports, and an exodus of skilled labor. This experience severely damaged the growth prospects whereby unstable sociopolitical institutions undermined the importance of economic freedom and civil liberties of its citizens and foreign investors. Empirical results presented here support the view that democratic values and economic freedom are significant for growth. A statistical test for the endogeneity of democracy variable rejects the null, thus the reverse causality, so democratic environment and economic freedom lead to higher economic growth.

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  • Rukmani Gounder, 2002. "Political And Economic Freedom, Fiscal Policy, And Growth Nexus: Some Empirical Results For Fiji," Contemporary Economic Policy, Western Economic Association International, vol. 20(3), pages 234-245, July.
    • Handle: RePEc:bla:coecpo:v:20:y:2002:i:3:p:234-245
    DOI: 10.1093/cep/20.3.234
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    Cited by:

    1. Rukmani Gounder, 2014. "Does Remittances Finance Welfare Development?: Evidence from the South Pacific Island Nation of Fiji," Proceedings of Economics and Finance Conferences 0401213, International Institute of Social and Economic Sciences.
    2. Paresh Kumar Narayan & Russell Smyth, 2006. "What Determines Migration Flows From Low‐Income To High‐Income Countries? An Empirical Investigation Of Fiji–U.S. Migration 1972–2001," Contemporary Economic Policy, Western Economic Association International, vol. 24(2), pages 332-342, April.
    3. Erdem Ekrem & Tugcu Can Tansel, 2012. "New Evidence on the Relationship Between Economic Freedom and Growth: A Panel Cointegration Analysis for The Case of OECD," Global Economy Journal, De Gruyter, vol. 12(3), pages 1-18, September.
    4. Emrah KOÇAK & Nısfet UZAY, 2018. "Democracy, Economic Freedoms and Economic Growth: An Investigation on the Role of Institutions," Sosyoekonomi Journal, Sosyoekonomi Society, issue 26(36).
    5. Rukmani Gounder, 2022. "Tourism-led and economic-driven nexus in Mauritius: Spillovers and inclusive development policies in the case of an African nation," Tourism Economics, , vol. 28(4), pages 1040-1058, June.
    6. Soo Khoon Goh & Koi Nyen Wong, 2014. "Could Inward FDI Offset the Substitution Effect of Outward FDI on Domestic Investment? Evidence from Malaysia," Prague Economic Papers, Prague University of Economics and Business, vol. 2014(4), pages 413-425.
    7. Bartleet, Matthew & Gounder, Rukmani, 2010. "Energy consumption and economic growth in New Zealand: Results of trivariate and multivariate models," Energy Policy, Elsevier, vol. 38(7), pages 3508-3517, July.
    8. goh, sookhoon, 2012. "Could inward FDI offset the substitution effect of outward FDI on domestic investment? evidence from Malaysia," MPRA Paper 43237, University Library of Munich, Germany.
    9. Prasad, Arti & Narayan, Paresh Kumar & Narayan, Jashwini, 2007. "Exploring the oil price and real GDP nexus for a small island economy, the Fiji Islands," Energy Policy, Elsevier, vol. 35(12), pages 6506-6513, December.
    10. Narayan, Paresh Kumar & Narayan, Seema & Prasad, Arti, 2008. "Understanding the oil price-exchange rate nexus for the Fiji islands," Energy Economics, Elsevier, vol. 30(5), pages 2686-2696, September.
    11. Paresh Narayan & Russell Smyth, 2005. "Trade Liberalization and Economic Growth in Fiji. An Empirical Assessment Using the ARDL Approach," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 10(1), pages 96-115.
    12. Aizhan Tleuberdinova & Zhanat Shayekina & Dinara Salauatova & Stephen Pratt, 2021. "Macro-economic Factors Influencing Tourism Entrepreneurship: The Case of Kazakhstan," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 30(1), pages 179-209, March.
    13. Saha, Shrabani & Gounder, Rukmani, 2013. "Corruption and economic development nexus: Variations across income levels in a non-linear framework," Economic Modelling, Elsevier, vol. 31(C), pages 70-79.
    14. Xiaodong Gong & Maheshwar Rao, 2014. "‘The Economic Impact of Prolonged Political Instability: A Case Study of Fiji’," NATSEM Working Paper Series 14/26, University of Canberra, National Centre for Social and Economic Modelling.
    15. Narayan, Paresh Kumar & Smyth, Russell, 2006. "Democracy and Economic Growth in China: Evidence from Cointegration and Causality Testing," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 2(1), pages 1-18.
    16. Doucouliagos, Chris & Ulubasoglu, Mehmet Ali, 2006. "Economic freedom and economic growth: Does specification make a difference?," European Journal of Political Economy, Elsevier, vol. 22(1), pages 60-81, March.
    17. George R. Crowley & John A. Dove & Daniel Sutter, 2017. "Voter Preferences, Institutions, And Economic Freedom," Contemporary Economic Policy, Western Economic Association International, vol. 35(1), pages 76-92, January.

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