Financial Freedom and Socially Responsible Market Economy: An Analysis from Rawls’s Theory of Justice

Abbas Ali Daryaei () and Hamid Haghighat ()
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Abbas Ali Daryaei : Imam Khomeini International University
Hamid Haghighat : Imam Khomeini International University

Journal of Money and Economy, 2017, vol. 12, issue 3, 251-275

Abstract: Using Rawls's theory of justice, this paper addresses the empirical question of whether the socially responsible market economy can help explain the current situation in financial freedom, as well as its recent variation across countries. Utilizing annual data from selected countries of Middle East, North Africa, Asia and Oceania, and static panel estimation techniques, we provide evidence which suggests that many Socially Responsible Market Economy (SRME) components are statistically significant determinants of Financial Freedom (FF). Our findings reveal that three factors of SRME, namely, organization of the market and competition, welfare regime and private property have a positive significant relationship with FF. Legislative bodies are advised to legislate impartial rules, through which they can develop the necessary grounds for financial liberalization and subsequent transparency of financial information in financial markets.

Keywords: Financial Freedom; Socially Responsible Market Economy; Rawls’s Theory of Justice; Governments (search for similar items in EconPapers)
JEL-codes: G18 G19 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:mbr:jmonec:v:12:y:2017:i:3:p:251-275

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