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Identifying the ‘deep roots’ of economic freedom with implications for policy and economic reform

Author

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  • Saunoris, James W.
  • Payne, James E.
  • Sobel, Russell S.

Abstract

Because of the importance of economic freedom for a country’s prosperity and growth, subsequent studies now try to uncover which factors explain the cross-country differences in economic freedom. Based upon Lawson, Murphy, and Powell’s (2020) recent literature review we provide the first empirical examination of the relative importance of all 18 of the key “deep root” factors they identify across the published literature. We employ a Bayesian Model Averaging (BMA) approach that is ideally suited for model identification and provides a statistical means to rank the importance of these deep root factors. Our results suggest that (in order of importance) latitude, exitability as measured by a country’s shape and coastal access, genetic distance, religion, and French legal origins are the most important of the deep root determinants of economic freedom. Policy implications of our findings are also discussed.

Suggested Citation

  • Saunoris, James W. & Payne, James E. & Sobel, Russell S., 2025. "Identifying the ‘deep roots’ of economic freedom with implications for policy and economic reform," Journal of Policy Modeling, Elsevier, vol. 47(1), pages 211-227.
    • Handle: RePEc:eee:jpolmo:v:47:y:2025:i:1:p:211-227
    DOI: 10.1016/j.jpolmod.2024.09.002
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    More about this item

    Keywords

    Economic freedom; Bayesian model averaging; Deep root determinants; Institutions;
    All these keywords.

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P1 - Political Economy and Comparative Economic Systems - - Capitalist Economies

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