and has been updated annually since. During this period, the EFW index has been cited in hundreds of academic articles. Here, we provide an accounting and description of this literature. Of 402 articles citing the EFW index, 198 used the index as an independent variable in an empirical study. Over two-thirds of these studies found economic freedom to correspond to a "good" outcome such as faster growth, better living standards, more happiness, etc. Less than 4% of the sample found economic freedom to be associated with a "bad" outcome such as increased income inequality. The balance of evidence is overwhelming that economic freedom corresponds with a wide variety of positive outcomes with almost no negative tradeoffs. (JEL P0, O43)
The Economic Freedom of the World Annual Report measures the degree to which the policies and institutions of countries are supportive of economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to enter markets and compete, and security of the person and privately owned property. Forty-two data points are used to construct a summary index, along with a Gender Legal Rights Adjustment to measure the extent to which women have the same level of economic freedom as men. The degree of economic freedom is measured in five broad areas: Size of Government, Legal System and Property Rights, Sound Money, Freedom to Trade Internationally, and Regulation.
The international development community has encouraged investment in physical and human capital as a precursor to economic progress. Recent evidence shows, however, that increases in capital do not always lead to increases in output. We develop a growth model where the allocation and productivity of capital depends on a country's institutions. We find that increases in physical and human capital lead to output growth only in countries with good institutions. In countries with bad institutions, increases in capital lead to negative growth rates because additions to the capital stock tend to be employed in rent‐seeking and other socially unproductive activities.
An outbreak of over one thousand COVID-19 cases in Provincetown, Massachusetts, in July 2021—the first large outbreak mostly in vaccinated individuals in the US—prompted a comprehensive public health response, motivating changes to national masking recommendations and raising questions about infection and transmission among vaccinated individuals. To address these questions, we combined genomic and epidemiological data from 467 individuals, including 40% of known outbreak-associated cases. The Delta variant accounted for 99% of outbreak-associated cases in this dataset; it was introduced from at least 40 sources, but 83% of cases derived from a single source, likely through transmission across multiple settings over a short time rather than a single event. Genomic and epidemiological data supported multiple transmissions of Delta from and between fully vaccinated individuals. However, despite its magnitude, the outbreak had limited onward impact in MA and the US, likely due to high vaccination rates and a robust public health response.
Previous research has shown that Tiebout-style fiscal competition among local governments reduces the likelihood of adopting income taxes. This literature has not yet considered the impact of yardstick competition on tax instrument choice. This article uses spatial econometrics to test for yardstick competition in the decision to adopt an income tax. The results, based on Ohio school district data, indicate that school districts are more likely to adopt an income tax if their neighbors have already done so. While a negative correlation of Tiebout competition on district income tax adoption persists, controlling for spatial dependence reduces the statistical significance of the effect.
There is a small but growing literature on the determinants of economic freedom. In this paper I contribute to this literature in two ways. First, I empirically show 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, I document the structural characteristics that contribute to this institutional convergence. My conditional convergence estimates suggest democratic institutions do not contribute 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 to the importance of "exit" versus "voice" with respect to the question of institutional change.
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