A note on the U-shaped relationship between political competition and economic freedom

Antonio Saravia ()

No 07/2008, Development Research Working Paper Series from Institute for Advanced Development Studies

Abstract: We investigate a recent political theory of institutional change according to which institutions of economic freedom are more likely to be adopted at the extreme cases of strong and weak political competition than at cases in between. We find that such a U-shaped relationship is verified when controlling for other political variables and past economic growth, but disappears when controlling for the initial level of development. In this case, the relationship between political competition and the adoption of institutions of economic freedom appears to be positive and linear as suggested by the political principal-agent paradigm.

Keywords: Economic Freedom; Institutional Change; Political Competition; Political Institutions (search for similar items in EconPapers)
JEL-codes: D72 H11 O57 P16 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2008-10
New Economics Papers: this item is included in nep-cdm and nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:adv:wpaper:200807

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