Date of Award
Fall 12-9-2021
Degree Type
Dissertation
Degree Name
Doctor of Philosophy (PhD)
School
Coastal Resilience
Committee Chair
Dr. Joseph St. Marie
Committee Chair School
Coastal Resilience
Committee Member 2
Dr. Shahdad Naghshpour
Committee Member 2 School
Coastal Resilience
Committee Member 3
Dr. Bob Pauly
Committee Member 3 School
Coastal Resilience
Committee Member 4
Dr. Tom Lansford
Committee Member 4 School
Coastal Resilience
Abstract
ABSTRACT
The centuries-old debate about the proper role of government in the economy requires an examination of the relationship between economic freedom and economic growth. The economic freedom indices published by the Fraser Institute and the Heritage Foundation allow researchers to empirically test the hypothesis that greater economic freedom leads to higher economic growth. Both of these leading economic freedom indices include components that annually measure rule of law, market openness, regulations, and government size for most countries. In both indices, a larger government size leads to a lower economic freedom score, all other variables held equal. This study challenges the current scoring treatment of government size.
The study’s central theoretical argument is that a larger government size cannot by definition be considered a curtailment of freedom without consideration of how tax revenues are spent. Regression tests are used to determine whether the indices can be improved as estimators of GDP per capita if the government size component is removed. Additionally, all other index components are tested to see if the exclusion of any other component would improve the indices’ effectiveness in estimating GDP per capita.
The study finds that the effectiveness of the indices to estimate GDP per capita increases if the government size component is removed. Furthermore, government size is the only index component that, if excluded, materially increases the effectiveness of the indices to estimate GDP per capita.
Copyright
Scholz, 2021
Recommended Citation
Scholz, Thomas Robert, "IMPROVING THE MEASUREMENT OF ECONOMIC FREEDOM" (2021). Dissertations. 1966.
https://aquila.usm.edu/dissertations/1966