Economic Freedom as a Driver for Growth in Transition

28 Pages Posted: 12 Feb 2009

See all articles by Jenni Paakkonen

Jenni Paakkonen

Government of the Republic of Finland - VATT Institute for Economic Research; Bank of Finland - Institute for Economies in Transition (BOFIT)

Date Written: January 14, 2009

Abstract

This paper reviews the political economy view of economic growth in post-communist economies making the transition to free markets, focusing on the role of economic policy and institutions. We test the hypothesis that better institutions, measured in terms of economic freedom, contribute to growth. The empirical results from the cross-section of transition economies confirm this hypothesis. The paper concludes that non-linearities are present in the growth model and that differences arise depending on how economic well-being is defined.

Keywords: growth, institutions, human capital

JEL Classification: O17, O40, O57

Suggested Citation

Paakkonen, Jenni, Economic Freedom as a Driver for Growth in Transition (January 14, 2009). BOFIT Discussion Paper No. 1/2009, Available at SSRN: https://ssrn.com/abstract=1341625 or http://dx.doi.org/10.2139/ssrn.1341625

Jenni Paakkonen (Contact Author)

Government of the Republic of Finland - VATT Institute for Economic Research ( email )

Arkadiankatu 7
P.O Box 1279
Helsinki, FIN-00531
Finland

Bank of Finland - Institute for Economies in Transition (BOFIT)

PO Box 160
Helsinki 00101
Finland

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