IDEAS home Printed from https://ideas.repec.org/p/hhs/aareco/2005_008.html
   My bibliography  Save this paper

Political Ideology and Economic Freedom

Author

Listed:

Abstract

This paper examines the association between political ideology and the size of government and quality of the legal system and regulations. A cross-country indicator of government and citizen ideology is presented. Empirical results suggest that ideologically leftwing governments increase the size of government while the long-term ideological convictions of citizens affect the size of government and the quality of the legal system and regulations. These effects depend on the degree of political competition while ideology also affects countries’ institutional response to economic crisis.

Suggested Citation

  • Bjørnskov, Christian, 2005. "Political Ideology and Economic Freedom," Working Papers 05-8, University of Aarhus, Aarhus School of Business, Department of Economics.
    • Handle: RePEc:hhs:aareco:2005_008
    as

    Download full text from publisher

    File URL: http://www.hha.dk/nat/wper/05-8_chbj.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
    2. Alesina, Alberto & Devleeschauwer, Arnaud & Easterly, William & Kurlat, Sergio & Wacziarg, Romain, 2003. "Fractionalization," Journal of Economic Growth, Springer, vol. 8(2), pages 155-194, June.
    3. Timothy Besley & Anne Case, 2003. "Political Institutions and Policy Choices: Evidence from the United States," Journal of Economic Literature, American Economic Association, vol. 41(1), pages 7-73, March.
    4. Paldam, Martin, 2003. "Economic freedom and the success of the Asian tigers: an essay on controversy," European Journal of Political Economy, Elsevier, vol. 19(3), pages 453-477, September.
    5. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    6. Frey, Bruno S & Stutzer, Alois, 2000. "Happiness, Economy and Institutions," Economic Journal, Royal Economic Society, vol. 110(466), pages 918-938, October.
    7. Edward L. Glaeser & Andrei Shleifer, 2002. "Legal Origins," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1193-1229.
    8. Hibbs, Douglas A., 1977. "Political Parties and Macroeconomic Policy," American Political Science Review, Cambridge University Press, vol. 71(4), pages 1467-1487, December.
    9. Alberto Alesina & George-Marios Angeletos, 2005. "Fairness and Redistribution," American Economic Review, American Economic Association, vol. 95(4), pages 960-980, September.
    10. Svensson, Jakob, 1998. "Investment, property rights and political instability: Theory and evidence," European Economic Review, Elsevier, vol. 42(7), pages 1317-1341, July.
    11. Christian Bjørnskov, 2005. "Does Political Ideology Affect Economic Growth?," Public Choice, Springer, vol. 123(1), pages 133-146, April.
    12. de Haan, Jakob & Sturm, Jan-Egbert, 2000. "On the relationship between economic freedom and economic growth," European Journal of Political Economy, Elsevier, vol. 16(2), pages 215-241, June.
    13. Daniel Kaufmann & Aart Kraay, 2002. "Growth without Governance," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2002), pages 169-230, August.
    14. Martin Paldam, 2001. "Corruption and Religion Adding to the Economic Model," Kyklos, Wiley Blackwell, vol. 54(2‐3), pages 383-413, May.
    15. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross‐Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
    16. Dani Rodrik, 1998. "Why Do More Open Economies Have Bigger Governments?," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 997-1032, October.
    17. Arthur T. Denzau & Douglass C. North, 1994. "Shared Mental Models: Ideologies and Institutions," Kyklos, Wiley Blackwell, vol. 47(1), pages 3-31, February.
    18. McClosky, Herbert, 1964. "Consensus and Ideology in American Politics," American Political Science Review, Cambridge University Press, vol. 58(2), pages 361-382, June.
    19. Douglass C. North, 1991. "Institutions," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 97-112, Winter.
    20. Henri L. F. De Groot & Gert‐Jan Linders & Piet Rietveld & Uma Subramanian, 2004. "The Institutional Determinants of Bilateral Trade Patterns," Kyklos, Wiley Blackwell, vol. 57(1), pages 103-123, February.
    21. Helliwell, John F., 2003. "How's life? Combining individual and national variables to explain subjective well-being," Economic Modelling, Elsevier, vol. 20(2), pages 331-360, March.
    22. Cukierman, Alex & Tommasi, Mariano, 1998. "When Does It Take a Nixon to Go to China?," American Economic Review, American Economic Association, vol. 88(1), pages 180-197, March.
    23. David S. Lee & Enrico Moretti & Matthew J. Butler, 2004. "Do Voters Affect or Elect Policies? Evidence from the U. S. House," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(3), pages 807-859.
    24. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65(2), pages 135-135.
    25. Mullins, Willard A., 1972. "On the Concept of Ideology in Political Science," American Political Science Review, Cambridge University Press, vol. 66(2), pages 498-510, June.
    26. Budge, Ian, 1994. "A New Spatial Theory of Party Competition: Uncertainty, Ideology and Policy Equilibria Viewed Comparatively and Temporally," British Journal of Political Science, Cambridge University Press, vol. 24(4), pages 443-467, October.
    27. James E. Anderson & Douglas Marcouiller, 2002. "Insecurity And The Pattern Of Trade: An Empirical Investigation," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 342-352, May.
    28. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
    29. Knack, Stephen, 2000. "Social capital and the quality of Government : evidence from the U.S. States," Policy Research Working Paper Series 2504, The World Bank.
    30. World Bank, 2004. "World Development Indicators 2004," World Bank Publications - Books, The World Bank Group, number 13890.
    31. Roemer, John E., 1994. "The Strategic Role of Party Ideology When Voters Are Uncertain about How the Economy Works," American Political Science Review, Cambridge University Press, vol. 88(2), pages 327-335, June.
    32. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
    33. William F. Shughart II & Laura Razzolini (ed.), 2001. "The Elgar Companion to Public Choice," Books, Edward Elgar Publishing, number 459.
    34. Rafael Di Tella & Robert MacCulloch, 2005. "Partisan Social Happiness," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(2), pages 367-393.
    35. Drazen, Allan & Grilli, Vittorio, 1993. "The Benefit of Crises for Economic Reforms," American Economic Review, American Economic Association, vol. 83(3), pages 598-607, June.
    36. Kormendi, Roger C. & Meguire, Philip G., 1985. "Macroeconomic determinants of growth: Cross-country evidence," Journal of Monetary Economics, Elsevier, vol. 16(2), pages 141-163, September.
    37. Pierre-Guillaume Méon & Laurent Weill, 2004. "Does better governance foster efficiency? An aggregate frontier analysis," Economics of Governance, Springer, vol. 6(1), pages 75-90, January.
    38. repec:cup:apsrev:v:58:y:1964:i:02:p:361-382_00 is not listed on IDEAS
    39. Anthony Annett, 2001. "Social Fractionalization, Political Instability, and the Size of Government," IMF Staff Papers, Palgrave Macmillan, vol. 48(3), pages 1-7.
    40. William D. Nordhaus, 1975. "The Political Business Cycle," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(2), pages 169-190.
    41. Sjoerd Beugelsdijk & Henri L.F. de Groot & Anton B.T.M. van Schaik, 2004. "Trust and economic growth: a robustness analysis," Oxford Economic Papers, Oxford University Press, vol. 56(1), pages 118-134, January.
    42. Roemer, J.E., 1992. "The Emergence of Party Ideology when Voter Are Uncertain about How the Economy Works," Papers 396, California Davis - Institute of Governmental Affairs.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cooray, Arusha & Tamazian, Artur & Vadlamannati, Krishna Chaitanya, 2014. "What drives FDI policy liberalization? An empirical investigation," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 179-189.
    2. Chortareas, Georgios & Logothetis, Vassilis & Papandreou, Andreas, 2018. "Public Opinion, Elections, and Environmental Fiscal Policy," Cardiff Economics Working Papers E2018/9, Cardiff University, Cardiff Business School, Economics Section.
    3. Chang, Chun-Ping & Wen, Jun & Zheng, Mingbo & Dong, Minyi & Hao, Yu, 2018. "Is higher government efficiency conducive to improving energy use efficiency? Evidence from OECD countries," Economic Modelling, Elsevier, vol. 72(C), pages 65-77.
    4. Imam, M. & Jamasb, T. & Llorca, M., 2019. "Political Economy of Reform and Regulation in the Electricity Sector of Sub-Saharan Africa," Cambridge Working Papers in Economics 1949, Faculty of Economics, University of Cambridge.
    5. Danko Tarabar & Andrew T. Young, 2017. "Liberalizing Reforms and the European Union: Accession, Membership, and Convergence," Southern Economic Journal, John Wiley & Sons, vol. 83(4), pages 932-951, April.
    6. Chun-Ping Chang & Chien-Chiang Lee, 2017. "The Effect of Government Ideology on an Exchange Rate Regime: Some International Evidence," The World Economy, Wiley Blackwell, vol. 40(4), pages 788-834, April.
    7. Niklas Potrafke, 2010. "Does government ideology influence deregulation of product markets? Empirical evidence from OECD countries," Public Choice, Springer, vol. 143(1), pages 135-155, April.
    8. Chang, Chun Ping & Berdiev, Aziz N., 2011. "The political economy of energy regulation in OECD countries," Energy Economics, Elsevier, vol. 33(5), pages 816-825, September.
    9. Erdogdu, Erkan, 2013. "Essays on Electricity Market Reforms: A Cross-Country Applied Approach," MPRA Paper 47139, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Christian Bjørnskov & Pierre-Guillaume Méon, 2013. "Is trust the missing root of institutions, education, and development?," Post-Print CEB, ULB -- Universite Libre de Bruxelles, vol. 157(3-4), pages 641-669, December.
    2. Bjørnskov, Christian, 2008. "The growth-inequality association: Government ideology matters," Journal of Development Economics, Elsevier, vol. 87(2), pages 300-308, October.
    3. Christian Bjørnskov, 2005. "Does Political Ideology Affect Economic Growth?," Public Choice, Springer, vol. 123(1), pages 133-146, April.
    4. Christian Bjørnskov, 2007. "Determinants of generalized trust: A cross-country comparison," Public Choice, Springer, vol. 130(1), pages 1-21, January.
    5. Christian Bjørnskov & Pierre-Guillaume Méon, 2012. "Trust as the missing root of institutions, education, and development," Working Papers CEB 12-031, ULB -- Universite Libre de Bruxelles.
    6. Licht, Amir N. & Goldschmidt, Chanan & Schwartz, Shalom H., 2007. "Culture rules: The foundations of the rule of law and other norms of governance," Journal of Comparative Economics, Elsevier, vol. 35(4), pages 659-688, December.
    7. Fuchs, Michaela & Wohlrabe, Klaus, 2008. "Institutions, trade, and integration: what can be expected within the enlarged EU?," Dresden Discussion Paper Series in Economics 16/08, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
    8. Bjørnskov, Christian, 2004. "Legal Quality, Inequality, and Tolerance," Working Papers 04-9, University of Aarhus, Aarhus School of Business, Department of Economics.
    9. Dilla, Diana, 2017. "Staatsverschuldung und Verschuldungsmentalität [Public Debt and Debt Mentality]," MPRA Paper 79432, University Library of Munich, Germany.
    10. Martin Paldam & Erich Gundlach, 2008. "Two Views on Institutions and Development: The Grand Transition vs the Primacy of Institutions," Kyklos, Wiley Blackwell, vol. 61(1), pages 65-100, February.
    11. Christian Bjørnskov & Niklas Potrafke, 2012. "Political Ideology and Economic Freedom Across Canadian Provinces," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 38(2), pages 143-166.
    12. Wahl, Fabian, 2012. "Why it matters what people think: Beliefs, legal origins and the deep roots of trust," FZID Discussion Papers 52-2012, University of Hohenheim, Center for Research on Innovation and Services (FZID).
    13. Lubna Hasan, 2007. "Myths and Realities of Long-run Development: A Look at Deeper Determinants," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 46(1), pages 19-44.
    14. Salma Hadj Fraj & Mekki Hamdaoui & Samir Maktouf, 2018. "Governance and economic growth: The role of the exchange rate regime," International Economics, CEPII research center, issue 156, pages 326-364.
    15. Ludek Kouba & Hans Pitlik, 2014. "I wanna live my life: Locus of Control and Support for the Welfare State," MENDELU Working Papers in Business and Economics 2014-46, Mendel University in Brno, Faculty of Business and Economics.
    16. Yu, Shu & Beugelsdijk, Sjoerd & de Haan, Jakob, 2015. "Trade, trust and the rule of law," European Journal of Political Economy, Elsevier, vol. 37(C), pages 102-115.
    17. Bjornskov, Christian, 2006. "The multiple facets of social capital," European Journal of Political Economy, Elsevier, vol. 22(1), pages 22-40, March.
    18. Andrea Asoni, 2008. "Protection Of Property Rights And Growth As Political Equilibria," Journal of Economic Surveys, Wiley Blackwell, vol. 22(5), pages 953-987, December.
    19. Steven N. Durlauf & Andros Kourtellos & Chih Ming Tan, 2008. "Empirics of Growth and Development," Chapters, in: Amitava Krishna Dutt & Jaime Ros (ed.), International Handbook of Development Economics, Volumes 1 & 2, volume 0, chapter 3, Edward Elgar Publishing.
    20. Chang Wen-Chun, 2008. "Toward Independence or Unification?," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 13(2), pages 124-153, January.

    More about this item

    Keywords

    Political Economy; Institutional Quality; Ideology; Social Norms;
    All these keywords.

    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:aareco:2005_008. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Helle Vinbaek Stenholt (email available below). General contact details of provider: https://edirc.repec.org/data/nihhadk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.