CAN THE DEVELOPMENT DIFFERENCES OF COUNTRIES BE EXPLAINED WITH A FREEDOM STRUCTURE?

Abstract

This study aims to test the relationship between the liberal structure of countries and the development of countries. GDP per capita and price stability were used as performance measures for this. For this purpose, two separate models were constructed for developed and developing countries. Model I analyses the effect of economic freedoms on GDP per capita and Model II analyses the impact of economic releases on the consumer price index. According to the analysis using panel data analysis for developed and developing country groups, the findings reveal that a libertarian structure positively affects economic growth and is a discriminator in the emergence of development differences in countries. In contrast, a libertarian design does not have a significant relationship with price stability. These findings provide evidence in support of the Monetarist view that inflation is always a monetary phenomenon. According to the results of this study, it is recommended that especially developing countries should implement prudent policies towards price stability in monetary and fiscal policy.

Keywords

• Economic Freedom
• Economic Growth
• Price Stability
• Panel Data Analysis

ÜLKELERİN GELİŞMİŞLİK FARKLILIKLARI ÖZGÜRLÜK YAPISI İLE AÇIKLANABİLİR Mİ?

Abstract

Bu çalışmanın amacı, ülkelerin liberal yapısı ile ülkelerin kalkınması arasındaki ilişkiyi test etmektir. Bunun için performans ölçütü olarak kişi başına düşen GSYİH ve fiyat istikrarı kullanılmıştır. Bu amaçla gelişmiş ve gelişmekte olan ülkeler için iki ayrı model oluşturulmuştur. Model I ekonomik özgürlüklerin kişi başına düşen GSYİH üzerindeki etkisini, Model II ise ekonomik özgürlüklerin tüketici fiyat endeksi üzerindeki etkisini analiz etmektedir. Gelişmiş ve gelişmekte olan ülke grupları için panel veri analizi kullanılarak yapılan analiz sonuçlarına göre, özgürlükçü bir yapının ekonomik büyümeyi pozitif yönde etkilediği ve ülkeler arasındaki gelişmişlik farklarının ortaya çıkmasında ayırt edici bir unsur olduğu, özgürlükçü bir yapının fiyat istikrarı ile anlamlı bir ilişkisinin olmadığı bulgularına ulaşılmıştır. Bu bulgular, enflasyonun her zaman parasal bir olgu olduğu yönündeki Monetarist görüşü destekleyen kanıtlar sunmaktadır. Bu çalışmanın sonuçlarına göre, özellikle gelişmekte olan ülkelerin para ve maliye politikalarında fiyat istikrarına yönelik ihtiyatlı politikalar uygulamaları önerilmektedir.

Keywords

• Ekonomik Özgürlük
• Ekonomik Büyüme
• Fiyat İstikrarı
• Panel Veri Analizi

References

1. Banaian, K. & Luksetich, W. (2001). Central bank independence, economic freedom, and inflation rates. Economic Inquiry. 39(1), 149-161 (30.05.2022) https://doi.org/10.1111/j.1465-7295.2001.tb00057.x.
2. Barro, R. J. (1991). Economic growth in a cross section of countries. Quarterly Journal of Economics, 106(2): 407-443. https://doi.org/10.2307/2937943
3. Barro, R., J. (1996). Democracy and growth. Journal of economic growth, 1(1), 1-27.
4. Barro, R. J. (2013). Democracy, law and order, and economic growth. In AT Miller, K., R. Holmes, and E., J. Feulner (Eds.), 2013 Index of Economic Freedom Chapter 3 (pp.41-58). The heritage foundation and Dow Jones and Company, Inc.
5. Bengoa, M. & Sanchez-Robles, B. (2003). Foreign direct ınvestment, economic freedom and growth: new evidence from Latin America. European Journal of Political Economy, 19(3), 529-545.
6. Brkic, I. Gradojevic, N. & Ingjattijević, S. (2020). The ımpact of economic freedom on economic growth? New European dynamic panel evidence. Journal of Risk Financial Management, 13 (2), 1-13.
7. Carlsson, F. & Lundström, S. (2002). Economic freedom and growth: decomposing the effects. Public Choice, 112 (3-4), 335-344.
8. Crampton, E., (2002). You get what you vote for: electoral determinants of economic freedom, Journal of Private Enterprise, 18(0211003), 1-20.

9. Dawson, J., W. (2003). Causality in the freedom–growth relationship. European Journal of Political Economy, 19 (3), 479-495.
10. De Haan, J. & Sturm, J. E. (2000). On the relationship between economic freedom and economic growth. European Journal of Political Economy, 16 (2), 215-241.
11. Doucouliagos, C. & Ulubasoğlu, M., (2004). Economic freedom and economic growth: selection, specification and genuine effects. In European Public Choice Society Meetings.
12. Eser, Z. E. (2016). Economic freedoms and development [Unpublished PhD Thesis]. Karadeniz Technical University Institute of Social Sciences.
13. Friedman, M. (2018). Capitalism and freedom (5th ed.). (D. Erberk and N. Himmetoğlu, Trans.). Eksi Books.
14. Grubel, H. G. (1998). Economic freedom and human welfare: Some empirical findings. Cato Journal, 18(2), 287-304.
15. Güriş, S. (2015). Stata ile panel veri modelleri. Der Yayınları.
16. Gwartney, J. D, Holcombe, R., G. & Lawson R., A. (2004). Economic freedom, ınstitutional quality, and cross-country differences in income and Growth. Cato Journal, 24(3), 205-233.
17. Gwartney, J. D. Holcombe, R. G. & Lawson, R. A. (2006). Institutions and the Impact of investment on growth. Kyklos, 59(2), 255-273.
18. Gwartney, J., D., Lawson, R., A. & Helcombe, R. G. (1999). Economic freedom and the environment for economic growth. Journal of Institutional and Theoretical Economics, 155(4), 643- 663.
19. Gwartney, J. D. Lawson, R. A. & Block, W. (1996). Economic freedom in the world: 1975-1995. Fraser Institute
20. Heckelman J. C. (2000). Economic freedom and economic growth: a short-run causal investigation. Journal of Applied Economics, 3(1), 71-91.
21. Herrera-Echeverri, H., Haar, J. and Benavides Estévez-Bretón, J. (2013). Foreign direct ınvestment, ınstitutional quality, economic freedom and entrepreneurship in emerging markets. Journal of Business Research, 67(9), 1921-1932.
22. Knack S. and Keefer, P. (1995). Institutions and economic performance: cross-country tests using alternative ınstitutional measures. Economics and Politics, 7(3), 207-227.
23. Koçak, E. (2016). Democracy, economic freedoms and growth: theory and empirical application [Unpublished Doctoral Dissertation]. Erciyes University Institute of Social Sciences.
24. Mahmood, K. Taseef A. Imran S. & Faridi, M. Z. (2010). Impact of economic freedom on economic growth: the case of some selected search member countries. International Research Journal of Finance and Economics, 52, 7-16.
25. Nelson, M. A. & Singh, R. D. (1998). Democracy, economic freedom, fiscal policy and growth ın lDCS: a fresh look. Economic Development and Cultural Change, 46(4), 677-696.
26. Tatoğlu, Yerdelen, F. (2020). Panel data econometrics (5th Edition). Beta Publishing.
27. Torstensson, J. (1994). Property rights and economic growth: an empirical Study. Cyclos, 47 (2), 231-247.
28. Tunçsiper, B. & Biçen, Ö. F. (2014). Examination of the relationship between economic freedoms and economic growth by panel regression method. Eskişehir Osmangazi University Journal of Feas, 9(2), 25-45.
29. Williamson, C. R. & Mathers, R. L. (2011). Economic freedom, culture and growth. Public Choice, 148(3-4), 313-335.
30. Yalman, İ., N. Sandalcılar, A. R. & Demirkoparan, F. (2011). Freedoms and economic development: Latin America and Turkey. Ataturk University Journal of FEAS. 10. Special Issue of Econometrics and Statistics Symposium, 431-444.