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Economic freedom reform: does culture matter?

Published online by Cambridge University Press:  31 March 2021

Nicholas Moellman  and
Danko Tarabar
Nicholas Moellman
Affiliation:
College of Business Administration, Winthrop University, Rock Hill, SC29733USA
Danko Tarabar*
Affiliation:
College of Business Administration, Winthrop University, Rock Hill, SC29733USA
*
*Corresponding author. Email: tarabard@winthrop.edu
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Abstract

We analyse the role of culture in economic freedom reform and dispersion in an unbalanced panel of up to 80 countries, and in dyadic models with up to 3,003 unique country pairs. We find that a sense of individualism strengthens the effectiveness of democracy in promoting economic freedom within countries over 1950–2015, and that institutional distance between countries increases in their cultural distance, suggesting an important role of culture in determining long-run institutional equilibria. Our results are robust to a large variety of socio-economic controls, measures of institutions and measures of bilateral geographic, economic and demographic distances.

Keywords

Cultureinstitutionseconomic freedom
Type
Research Article
Information
Journal of Institutional Economics , Volume 18 , Special Issue 1: Institutions and Culture in Economic Contexts , February 2022 , pp. 139 - 157
Copyright
Copyright © Millennium Economics Ltd 2021

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