On Whether the Size of Government Belongs in Economic Freedom Indices

Ryan H. Murphy

Econ Journal Watch, 2022, vol. 19, issue 1, 47–57

Abstract: Jan Ott (2018) uses the concept of convergent validity to recommend that the size of government be removed from measures of economic freedom. While he assesses both the measure from the Heritage Foundation and the Economic Freedom of the World (EFW) measure, I focus on EFW, which is more significant in the academic sphere and with which I myself am associated. Ott’s article is in a line of research which suggests the size of government should be treated differently than other economic freedom data, because it behaves differently across countries. I criticize Ott (2018) while speaking also to this other literature. First, Ott’s primary finding is contingent on the sample used and contingent on an older version of the economic freedom data. Second, and more importantly, EFW is a formative construct, which means that its constituent dimensions are what define it. Third, were we to apply Ott’s methodology to other measures of institutions, we would reach conclusions that most observers would find untenable. Disaggregating size of government from the other dimensions of economic freedom may be useful for narrow questions, but removing the size of government simply inhibits our ability to properly test hypotheses concerning economic freedom.

Keywords: Economic freedom; size of government; validity; convergent validity (search for similar items in EconPapers)
JEL-codes: H10 O43 P10 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://econjwatch.org/File+download/1224/MurphyMar2022.pdf?mimetype=pdf (application/pdf)
https://econjwatch.org/1273 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ejw:journl:v:19:y:2022:i:1:p:47-57

Access Statistics for this article

Econ Journal Watch is currently edited by Daniel Klein

More articles in Econ Journal Watch from Econ Journal Watch Contact information at EDIRC.
Bibliographic data for series maintained by Jason Briggeman ().