Poverty and Economic Freedom: Evidence from Cross-Country Data
Rana Hasan East-West Center M.G. Quibria Asian Development Bank and Yangseon Kim East-West Center
in: East West Center Working Paper Series 60 (2003) September
verfügbar in Academia
– ökonomische Freiheit befördert Wohlstand in Entwicklungsländern
– ökonomische Freiheit ist wichtiger als die für die Wohlstandsmehrung einflusslose politische Freiheit
– wesentliche ökonomische Freiheitsindikatoren werden bestätigt: Freihandel, beschränkte Regierung (Minimalstaat). Eigentumsrechte und Herrschaft des Rechts
This paper explores the empirical relationship between poverty and economic freedom. In doing so, it estimates the levels of absolute poverty for a panel of over forty developing countries and then utilizes fixed effects and GMM-IV estimators to derive the empirical relationships. The principal empirical results that emerge from this exercise indicate that important indicators of economic freedom such as openness to trade and small size of the government are robustly associated with poverty reduction. Labor market flexibility, which reflects an important dimension of economic freedom, does not have a significant effect on poverty on average. However, there is some evidence that trade’s beneficial impact on poverty has been smaller in economies with more regulated labor markets. Finally, civil liberties that encompass various types of important economic freedom such as property rights, rule of law, etc., also contribute significantly to poverty reduction. This result contrasts with that for political liberties, which have seemingly no impact on poverty reduction. All these suggest that economic freedom is as much important for economic growth as for poverty reduction.