Document Type
Working Paper
Publication Date
9-2015
College/Unit
Chambers College of Business and Economics
Document Number
15-40
Department/Program/Center
Economics
Abstract
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 beta-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.
Digital Commons Citation
Hall, Joshua C., "Institutional Convergence: Exit or Voice?" (2015). Economics Faculty Working Papers Series. 173.
https://researchrepository.wvu.edu/econ_working-papers/173