Economic Freedom in the Long Run: Evidence from OECD Countries (1850-2007)

92 Pages Posted: 2 Jun 2014

See all articles by Leandro Prados de la Escosura

Leandro Prados de la Escosura

Universidad Carlos III de Madrid - Faculty of Social Sciences and Law; Centre for Economic Policy Research (CEPR)

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Date Written: March 2014

Abstract

This paper presents historical indices for the main dimensions of economic freedom and an aggregate index for nowadays developed countries -(pre-1994) OECD, for short-. Economic liberty expanded over the last one-and-a-half centuries, reaching two thirds of its maximum possible. Its evolution has been, however, far from linear. After a substantial improvement since mid-nineteenth century, World War I brought a major setback. The post-war recovery up to 1929 was followed by a dramatic decline in the 1930s and significant progress took place during the Golden Age but fell short from the pre-World War I peak. A steady expansion since the early 1980s has resulted in the highest levels of economic liberty of the last two centuries. Each main dimension of economic freedom exhibited a distinctive trend and its contribution to the aggregate index varied over time. Nonetheless, improved property rights provided the main contribution to the long-run advancement of economic liberty.

Keywords: economic liberty, negative freedom, OECD

JEL Classification: N10, O17, P10

Suggested Citation

Prados de la Escosura, Leandro, Economic Freedom in the Long Run: Evidence from OECD Countries (1850-2007) (March 2014). CEPR Discussion Paper No. DP9918, Available at SSRN: https://ssrn.com/abstract=2444861

Leandro Prados de la Escosura (Contact Author)

Universidad Carlos III de Madrid - Faculty of Social Sciences and Law ( email )

Getafe (Madrid), 28903
Spain
+34916249623 (Phone)

HOME PAGE: http://www.uc3m.es/portal/page/portal/dpto_historia_economica_inst/home/faculty/leandro_prados_escos

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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