Does Constitutional Entrenchment Matter for Economic Freedom?
Contemporary Economic Policy (Forthcoming)
54 Pages Posted: 5 Sep 2020 Last revised: 2 Mar 2021
Date Written: March 2021
A growing number of studies explore the determinants of economic freedom. Very few of them consider constitutional design. We study entrenchment, i.e., the extent to which constitutions are more costly to change than ordinary policies and institutions. We utilize 1970-2017 data and study episodes where countries adopted meaningfully more entrenched constitutions. Using matching methods, we construct plausible counterfactuals against which to compare their post-treatment changes in economic freedom. We report no significant effects on overall freedom. There is some evidence that entrenchment leads to smaller government size, more regulation, and weaker property rights. However, none of these results are robust.
Keywords: constitutions; entrenchment; constitutional rigidity; political economy; institution; economic freedom
JEL Classification: P00, P16, P48
Suggested Citation: Suggested Citation