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Economic Freedom and Economic Growth in South Africa

Author

Listed:
  • Clive E. Coetzee

    (North-West University, South Africa)

  • Ewert P. J. Kleynhans

    (North-West University, South Africa)

Abstract

The economic growth and economic freedom nexus is studied in this article and applied to South Africa in an empirical study. Economic freedom is founded on the free or private market economy, based on competition, where voluntary exchange occurs and a legislative framework ensures the safety of market agents and private property. As part of the literature study, the Index of Economic Freedom, the Economic Freedom of the World Index and the Freedom in the World Index were studied and applied to South Africa. An empirical analysis was conducted, cross-correlation functions were estimated, and Granger causality functions, regression analysis and finally a vector auto-regression model (VAR) were constructed and estimated. The research findings from South Africa support the literature, suggesting that there are indeed some indications that greater levels of economic freedom support higher rates of economic growth in a country.

Suggested Citation

  • Clive E. Coetzee & Ewert P. J. Kleynhans, 2017. "Economic Freedom and Economic Growth in South Africa," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 15(2 (Summer), pages 169-185.
    • Handle: RePEc:mgt:youmgt:v:15:y:2017:i:2:p:169-185
    DOI: 10.26493/1854-6935.15.169-185
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    References listed on IDEAS

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    6. Kazeem Bello Ajide & Perekunah Bright Eregha, 2015. "Foreign Direct Investment, Economic Freedom and Economic Performance in Sub-Saharan Africa," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 13(1 (Spring), pages 43-57.
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    Cited by:

    1. Renato Santiago & José Alberto Fuinhas & António Cardoso Marques, 2020. "The impact of globalization and economic freedom on economic growth: the case of the Latin America and Caribbean countries," Economic Change and Restructuring, Springer, vol. 53(1), pages 61-85, February.
    2. Gouider, Abdessalem & Nouira, Ridha & Saafi, Sami, 2022. "Re-Exploring the Nexus Between Economic Freedom and Growth: Is There a Threshold Effect?," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 47(3), pages 147-167, September.
    3. Bekana, Dejene Mamo, 2020. "Institutions, Innovation and Economic Growth in Sub-Saharan Africa: A Literature Review," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 29(01), April.
    4. Jeffrey Kouton, 2019. "Relationship between economic freedom and inclusive growth: a dynamic panel analysis for sub-Saharan African countries," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 21(1), pages 143-165, June.

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    More about this item

    Keywords

    economic freedom; privilege; regulation; monopoly; economic growth;
    All these keywords.

    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • H1 - Public Economics - - Structure and Scope of Government
    • P5 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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