Institutions as predictors of government discrimination

Exclusion of some groups caused by the misuse of government power remains a major problem across the world. We propose that market‐oriented institutions and policies have the capacity to reduce such exclusion. To test this, we use an overall measure derived from the V‐Dem dataset, capturing government discrimination based on political group, social group, socio‐economic group, and gender, which we combine with the Fraser Institute's Economic Freedom of the World index. The sample consists of 153 countries for 1970–2020, which we organize in a panel consisting of consecutive, non‐overlapping 5‐year periods, rendering up to about 1,200 observations. Our estimates show a clear negative association between the rule of law and government discrimination in electoral democracies and electoral autocracies but not in single‐party autocracies. There are, however, reasons for not considering the finding for electoral autocracies causal. Two further areas of economic freedom seem to matter: free trade is negatively related to government exclusion in electoral democracies, while regulatory freedom is so in both types of autocracies. Thus, it seems as if a market‐economic system may be able to constrain public officials in the direction of non‐discrimination.