Is “economic freedom” strictly free market capitalism? A decompositional analysis of the Economic Freedom of the World index

Joseph Cohen ()

MPRA Paper from University Library of Munich, Germany

Abstract: The Frasier Institute’s Economic Freedom of the World is often taken as a metric of market capitalism. This paper argues that the index is an amalgam of measures capturing free markets and good governance, and analysts should remain cognizant of this conceptual conflation when using the index to develop policy prescriptions. Implicitly, the “economic freedom” literature suggests that countries embrace an “Anglo-Swiss” policy model, although the rich world offers alternative models that maximize good governance but not liberalization. Factor analyses suggest that the index’s Legal System & Property Rights component is more closely related to outside governance metrics that do not imply market liberalism than other “economic freedom” constituent measures.

Keywords: Economic Freedom; Capitalism; Governance; Economic Policy; Economic Development (search for similar items in EconPapers)
JEL-codes: O1 P1 P5 (search for similar items in EconPapers)
Date: 2009-11
New Economics Papers: this item is included in nep-dev, nep-hpe and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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https://mpra.ub.uni-muenchen.de/33676/3/MPRA_paper_33676.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:22437

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