Does Economic Freedom Foster Tolerance?

Niclas Berggren and Therese Nilsson ()

No 918, Working Paper Series from Research Institute of Industrial Economics

Abstract: Tolerance has the potential to affect both economic growth and wellbeing. It is therefore important to discern its determinants. We add to the literature by investigating whether the degree to which economic institutions and policies are market-oriented is related to different measures of tolerance. Regression analysis of up to 65 countries reveals that economic freedom is positively related to tolerance towards homosexuals, especially in the longer run, while tolerance towards people of a different race and a willingness to teach kids tolerance are not strongly affected by how free markets are. Stable monetary policy and outcomes is the area of economic freedom most consistently associated with greater tolerance, but the quality of the legal system seems to matter as well. We furthermore find indications of a causal relationship and of social trust playing a role as a mechanism in the relationship between economic freedom and tolerance and as an important catalyst: the more trust in society, the more positive the effect of economic freedom on tolerance.

Keywords: Markets; Economic freedom; Tolerance; Government; Institutions; Regulation (search for similar items in EconPapers)
JEL-codes: P10 P48 Z13 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2012-04-20
New Economics Papers: this item is included in nep-pol and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published as Berggren, Niclas and Therese Nilsson, 'Does Economic Freedom Foster Tolerance?' in Kyklos, 2013, pages 177-207.

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Related works:
Journal Article: Does Economic Freedom Foster Tolerance? (2013)
Working Paper: Does Economic Freedom Foster Tolerance? (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0918

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