Globalization and economic freedom

New evidence using the Dreher Indices

Seminar with Christian Bjørnskov (Aarhus School of Business) arranged by Center for Strategic Management and Globalization.

ABSTRACT: This paper employs a panel data set to estimate the effect of globalization on four measures of economic freedom. Contrary to previous studies, the paper distinguishes between three separate types of globalization: economic, social and political. It also separates effects for poor and rich countries, and autocracies and democracies. The results show that economic globalization is negatively associated with government size and positively with regulatory freedom in rich countries; social globalization is positively associated with legal quality in autocracies and with the access to sound money in democracies. Political globalization is not associated with economic freedom.