 Institutional convergence: exit or voice?Journal of Economics and Finance, 2016, vol. 40, issue 4, No 11, 829-840 Abstract: Abstract There is a small but growing literature on the determinants of economic freedom. This paper contributes to this literature in two ways. First, it is empirically shown that β-convergence in economic freedom occurred from 1980 to 2010. Countries with low levels of economic freedom in 1980 “catch up” at a rate of 0.7 percent a year on average, ceteris paribus. Second, the structural characteristics that contribute to this institutional convergence are documented. Conditional convergence estimates suggest democratic institutions do not con- tribute to conditional convergence. Exitability, a variable that captures how easy it is for citizens to “vote with their feet” is related to the change in economic freedom from 1980 to 2010 in a statistically significant manner across all specifications. This provides some preliminary evidence as to the importance of “exit” versus “voice” with respect to the question of institutional change. Keywords: Convergence; Economic freedom; Institutional change; Democracy; Exit (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:spr:jecfin:v:40:y:2016:i:4:d:10.1007_s12197-015-9345-3 Ordering information: This journal article can be ordered from DOI: 10.1007/s12197-015-9345-3 Access Statistics for this article Journal of Economics and Finance is currently edited by James Payne More articles in Journal of Economics and Finance from Springer, Academy of Economics and Finance Contact information at EDIRC. |
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