Linking Economic Freedom to Economic Growth in India ...



Linking Economic Freedom to Economic Growth in India: Empirical Evidences

FALGUNI PATTANAIK[1], NARAYAN CHANDRA NAYAK[2]

ABSTRACT

The recent moves of the Indian economy towards further opening the economy with less government control have brought about a host of changes in the policy structure with respect to the size of the government, legal structure and security of property rights, and labour, credit and business regulations of the country. Economic freedom which comprises all the above-mentioned factors may have created favourable impacts on the growth of India’s GDP and GDP per-capita. In a federal system like India, business regulations, taxation, and government spending differ widely across states. All these may have a bearing on the performances of the economies of the respective states. The present study considering major states of the country attempts to test the hypothesis that greater economic freedom leads to higher level of output and higher per-capita income. Lin-log method is applied to categorical data containing economic freedom, level of output and income per capita for a panel of 20 states for three time periods. The results tend to establish the fundamental effects of economic freedom in fostering economic growth and high income per capita. Three individual dimensions of economic freedom namely size of the government, a strong rule of law, and flexible regulations governing credit, labor, and product markets are also likely to exert beneficial impacts on GDP and GDP per capita. Ensuring high economic freedom is thus a critical instrument towards achieving high economic growth in India.

Key Words: Economic freedom, economic growth, income per capita, labour market regulation, legal structure, size of the government

1. INTRODUCTION

It is now widely established that market-oriented reforms will foster economic development (Berggren, 2003). Liberalization of markets and building institutions for market are considered crucial elements of Washington-consensus (World Bank, 2002), where adjustment programs of international organizations like the International Monetary Fund (IMF) and the World Bank helps freeing the economy from too much of government intervention. According to the World Bank (2002), market-based institutions help in transmitting information efficiently, enforcing property rights and contracts, and securing competition, which influence economic development (De Vanssay and Spindler, 1994; Alesina, 1998; De Haan and Siermann, 1998; Nelson and Singh, 1998). Institutions assure economic freedom and have the credible ability to make the growth-enhancing incentives available through low taxation, independent legal system and protection of private property (Murphy et al. 1991; Gwartney, 2009). Besides, there is a dynamic and organised economy, where free and fair competition exists due to proper regulations and government enterprises are less in number (Johansson, 2001). The presence of these institutions also help promote predictable and rational decisions, maintain a low and stable inflation rate (Akerlof et al. 1996) and provide incentives for free flow of trade and capital investments carrying significant bearings on economic growth (Slaughter, 1997).

A gradual transformation of the Indian economy was initiated as early as in late 1980s with trade liberalization, slow but steady deregulation of investment and output controls. However, since 1991 with the adoption of the economic reform programmes, economy has witnessed a transition from a state-led development model to a neoliberal paradigm. As a result, India has undergone a great deal of change internally and externally which ensures more visibility of ‘invisible hands’ of free competitive market economy (Ghosh and Chandrasekhar, 2007). Changes are noticeable and the growth rates of aggregate and per capita national income have been quite impressive during the period of economic liberalization. The recent moves of the Indian economy towards further opening up of the economy with less government control has brought changes in the policy structure with respect to the size of the government – expenditures, taxes and enterprises, legal structure and security of property rights, regulation of labour and business of the country (Debroy et al. 2011). Economic freedom which comprises all the above-said factors may have the potential impact on and may facilitate a better integration with economic development outcomes like growth rate (De Haan and Sturm, 2000; Leschke, 2000; Gwartney and Lawson, 2003; Heckelman and Stroup, 2005; De Haan et al. 2006) and per capita income (De Vans ay and Spindler, 1994; Islam, 1996; Ashby and Sobel, 2008) in India.

In a federal system like India, economic and political institutions, such as business regulation, taxation, and government spending, differ across state just as they do across national governments. The present study, while considering major Indian states, makes an effort to test the hypothesis that greater economic freedom leads to higher rates of economic growth and higher per capita income for the states. The study not only tests the effects of aggregate economic freedom on economic growth and per capita income, but also considers how each of the sub-areas of aggregate economic freedom influences economic growth and per capita income of the Indian states. This may enable us to determine which economic and political factors (the size of government, taxation, or labor market freedom) (Carlsson and Lundström, 2002; Berggren, 2003) exert greater impact on states’ economic growth and per capita income.

Accordingly, the paper is organized into six sections. Section 2 critically examines the existing literature on economic freedom as an important factor accounting for economic development i.e. economic growth and per capita income. Stylized facts on the trends in economic freedom along with three individual areas, the magnitude of economic freedom and economic growth and per capita income across the major states are presented in section 3. Section 4 outlines estimation techniques and database of the study. Section 5 focuses on economic freedom that affects economic growth and per capita income. Section 6 draws implications from the findings and concludes the study.

2. REVIEW OF LITERATURE

As large differences exist in the literature examining relationship of economic growth and development of countries around the world, a new line of research on economic freedom is considered as an important factor for economic development. ‘Economic freedom’ means the degree to which a market economy is in place, where the central components are voluntary exchange, free competition, and protection of persons and property (Gwartney et al. 1996). The goal is to characterize the institutional structure and central parts of economic policy (North, 1990). The incentives that economic actors (entrepreneurs, innovators, financiers, industrialists, and others) achieve are determined in large part by the institutions in place, (North, 1990), which can be inefficient or efficient.

2.1 Economic freedom and Economic Growth: Theoretical Consideration and Empirical Evidences

As economic freedom implies competition, there are assorted reasons to expect that free economies will grow more rapidly than those that are less free (Gwartney et al. 2007). In general, competition is widely believed to lead to higher rates of economic growth. A liberal economy provides greater opportunities for entrepreneurial discoveries and brings private investments towards the areas experiencing the highest rate of return (Parente and Prescott, 2000). However, it is necessary to investigate the sub-components of freedom indices to examine what aspects of freedom affect economic growth and per capita income (Ayal and Karras, 1998; Heckelman and Stroup, 2000; Carlsson and Lundstrom, 2002; Dawson, 2003, and Berggren and Jordahl, 2006) (Figure 1).

With regard to size of the government, opinions on the optimal size of the government depend on the perception of how well the government pursues its tasks, which, in turn, is largely dependent on the assumed underlying motives of the policy makers (Justesen, 2008). From the perspective of public-choice, where government works with purely selfish motive, the conclusion by and large is that ‘the smaller, the better’. However, if it is assumed that government is a benevolent social planner trying to maximize some social welfare functions, the conclusion may be different (Barro, 1990). There is substantial evidence that high levels of taxes and government consumption may retard economic growth (Gwartney and Lawson, 2003). At the same time, there is a general agreement that the government does have some efficiency-enhancing role (like providing pure public goods) (Angelopoulos et al. 2007), even though its exact role is not yet demarcated (De Haan et al. 2006).

For area 2, which pertains to legal structure and security of property rights, there seems to be a broad consensus in the literature that secure property rights are crucial for economic growth (Parente and Prescott, 2000). First, secure and transferable rights over assets and contracts are investment-generating and hence growth-enhancing, since owners can be sure that they will receive the benefits of their investments (World Bank, 2002). Second, with secure property rights, the allocation of assets becomes efficient and hence it becomes growth-promoting (World Bank, 2002). Savings will be transferred to activities with the highest expected profits. However, protection of property may create a monopoly situation for the economic actor owning the right. A functioning legal structure and secure property rights may be necessary as a complementary institution to all other categories of economic freedom (Rodrik, 2000).

Access to sound money is yet another area of economic freedom, which focuses on the costs of inflation. There are good reasons why especially high and volatile inflation will have a negative impact on growth (Briault, 1995). However, Akerlof et al. (1996) argue that a moderate level of inflation provides ‘grease’ to the price and wage setting process. The economic adjustment of relative prices to shocks can become sluggish in the presence of downward nominal rigidities in wages and prices. A moderate level of inflation provides for some real wage flexibility, which reduces the natural, or long run, rate of unemployment (Loboguerrero and Panizza, 2003). The empirical evidences on the inflation-growth nexus is, however, somewhat mixed.

With respect to area 4, which is about freedom to trade internationally, it is considered that there are efficiency effects from trade liberalization. The benefit is that the interaction with global market may bring about diffusion of technology. in combination with international competition, it enhances the productivity of the domestic firms if exchange is being done according to the comparative advantages (Greenaway et al. 2002). However, there is an inconclusive debate on the relationship between trade liberalization and economic growth (Sachs and Warner, 1995; Rodriguez and Rodrik, 2000). Some authors (Greenaway et al. 2002) report evidence in support of a positive linkage, while others (Yanikkaya, 2003) are skeptical.

Regulation of labour, credit, and business is yet another dimension of economic freedom. There is a broad consensus that less regulation in general becomes beneficial for growth (Calmfors and Driffill, 1988, Baumol et al. 2007). However, to what extent all the components included are detrimental to growth remains disputed (Altman, 2007).

Figure 1: Conceptual framework: Economic freedom and economic growth

[pic]

Source: Adopted with modification from Gwartney and Lawson (2007).

3. DATABASE AND EMPIRICAL METHODOLOGY

3.1 Database

The economic freedom scores of the country at large are presented and analyzed taking that from the Economic Freedom of the World report constructed by the Fraser Institute (Gwartney et al, 2010). The latter considers five major areas as mentioned earlier with many components and sub-components and 42 distinct variables. Each component and sub-component is placed on a scale of 0 to 10 reflecting the distribution of the underlying data. Each sub-component, component and area is averaged to derive the ratings of each component, area and economic freedom of each country respectively.

Turning to state-wise analysis in India, economic freedom indices considered are taken from Economic Freedom of Indian states 2011 (Debroy et. al 2011) for the year 2005, 2007 and 2009. The areas for which the index is constructed are derived from the Economic Freedom of the World report constructed by the Fraser Institute. This ensures that the economic freedom rating for Indian states has measures that are somewhat comparable with those of other countries. However, given Indian conditions and the sharing of responsibilities between the states and the central government, only three of the five areas are found to be appropriate where state governments have powers to directly affect conditions and institutions (Table A1). Those are (1) size of government: expenditures, taxes and enterprises, (2) legal structure and security of property rights, (3) regulation of labour and business. These three areas are designed to measure all major aspects of the economic freedom of the states. The rating scale of the economic freedom index ranges from 0 to 1, with 0 representing the lowest and 1 the highest degree of economic freedom. To measure the effects of economic freedom on economic growth and per capita income, data on economic growth and per capita income were collected from the Central Statistical Organisation for the above-said period.

3.2 Model Specification

This study uses pooled model analysis which is an inalienable instrument for the study of political and institutional determinants of macroeconomic policies and performances (Alvarez et al. 1991; Hicks, 1991; Swank, 1992). This enables us to exploit both the cross-country and the time-series variations included in the sample.

Pooled linear regression model: … 1

Where i = 1, 2… N; refers to a cross-sectional unit;

t = 1, 2… T; refers to a time period

Empirical models:

… 2

… 3

… 4

… 5

Empirical models are designed to ensure that the potential econometric problems—specification bias and simultaneity—are taken into account. By taking lag of one year for all the respective explanatory variables, it allows for slow adjustment because changes in economic freedom are likely to affect economic growth only after some time (Auerbach and Gale, 2009). To avoid the problem of multicollinearity, we estimate each area of economic freedom and aggregate economic freedom individually, not simultaneously. Finally, to correct for heteroskedasticity, we estimate robust t-statistics using the technique developed by White.

4. ECONOMIC FREEDOM IN INDIA

India, having passed through a long phase of colonial rule till 1947 started its process of economic development with a protective regime since 1950s. It adopted development strategy, which emphasized government planning of macroeconomic and sectoral development, industry protection (import substitution and/or export promotion) and state-owned enterprises (World Bank, 1997). By the 1980s, it became clear that the results of state-dominated development were not very encouraging. Consequently, the first phase of economic reforms was set in mid-1980s with restrictive withdrawal of the government from the free play of market forces. However, comprehensive economic reforms were brought into force only in 1990s. These reforms emphasized on a free market economy and consequently, attempts were made to reduce government intervention in as many areas as possible.

Adoption of the economic reform programmes in the early 1990s brought about the changes that took place in the structure and growth rate of GDP. Since 1991, India has undergone a great deal of liberalization internally and externally. The academic literature often refers to first and second generation reforms (Jha, 2009). First generation reforms include the external sector (where the first flush of reforms was introduced in 1991), while second generation reforms pertain more to the domestic economy. Besides, first generation reforms often refer to agenda items that are under the purview of the central government (such as product markets), whereas second generation reforms primarily emphasize on agenda items falling within the purview of the states (such as markets for land and labour).

These reforms have brought about an improvement in the scores of economic freedom over time with 5.1 in 1990 to 6.4 in 2008 (Table 1). All the indicators of economic freedom have shown a constant improvement since 1990 except access to sound money. The score of access to sound money has shown fluctuations with scores of 6.6, 6.5, 6.8 and 6.6 in 1990, 1995, 2000 and 2008 respectively. It is thus understandable that India’s scores on economic freedom have improved over time. The individual indices which measure the extent of freedom from restrictions imposed by government in India have shown improvement over the period of time (Debroy et. al 2011).

Table 1: India’s performance in economic freedom and economic growth 1970-2008

|Year |Economic Freedom |GDP |

| |Size of Government |

|[pic] |[pic] |

|Economic Freedom Index: 0.2-0.3 0.31-0.4 0.41-0.5 0.51-0.6 Not Studied |

|Economic Growth rate < 6 6.1-8 8.1-10 10.1> Not |

|Studied |

Source: Economic Freedom of the States of India 2011 and Central Statistical Organisation

Figure 3: Economic freedom and per capita income in India across major states 2009-10

|Growth of Per capita Income (2009) |Economic Freedom in India (2009) |

|[pic] |[pic] |

|Economic Freedom Index: 0.2-0.3 0.31-0.4 0.41-0.5 0.51-0.6 Not Studied |

|Growth of Per Capita Income < 4 4.1-6 6.1-9 9.1 > Not |

|Studied |

Source: Economic Freedom of the States of India 2011 and Central Statistical Organisation

5. THE EFFECT OF ECONOMIC FREEDOM ON GDP AND GDP PER CAPITA IN INDIA

The key variables of interest of this study are economic freedom and economic freedom indices. The results regarding the effect of overall economic freedom on economic growth are presented in column 1 of table 2. The coefficient of the overall economic freedom index is positive and significant, indicating thereby that higher levels of economic freedom tend to achieve higher economic growth across the states.

The results for the economic freedom indices for areas 1, 2, and 3 are shown in columns 2, 3 and 4 of table 2, respectively. Considering the economic freedom index for the size of government (area 1), the fundamental assertion is that the lower the government’s intervention, the better it is from the point of view of economic freedom which leads to higher economic growth. The coefficient of this index is positive and significant revealing thereby that states with lower government spending as a share of the total, a smaller government enterprise sector and lower marginal tax rates are likely to attain greater economic growth. The coefficient estimates of the area 2 (legal structure and security of property rights) for economic freedom index, is positive but statistically not significant. The primary assertion is that ensuring law and order and justice and protecting property is a core governance area. The coefficient estimates on the economic freedom index for area 3 (regulation of labour and business) are positive and statistically significant. This area of economic freedom primarily reflects state intervention in labour markets and bureaucratic and procedural costs, including physical infrastructure. They all have significant bearing on determining the level of economic growth. This implies high flexibility in the labour market tends to increase the output growth. All three areas of economic freedom indices are also taken simultaneously to check the robustness of the model. The regression exerts the same results (Table 2, column 5) showing coefficients of area 1 and 3 of economic freedom indices as positive and statistically significant.

Table 2: Relationship between economic freedom index components and economic growth

| |Level of GSDP |

|Variable |1 |2 |3 |4 |5 |

|Economic freedom |1.50* | | |

| |(3.46) | | |

|Economic freedom (Area 1) | |0.83** | |0.73** |

| | |(2.36) | |(2.19) |

|Economic freedom (Area 2) | |0.37 | |0.24 |

| | |(1.47) | |(1.01) |

|Economic freedom (Area 3) | |0.77* |0.67** |

| | |(2.67) |(2.36) |

|Constant |4.51* |4.74* |4.93* |4.81* |4.46* |

| |(26.99) |(31.99) |(45.87) |(44.85) |(25.03) |

|Adjusted R2 |0.17 |0.07 |0.01 |0.09 |0.15 |

|F -Statistics |11.97* |5.58** |2.15 |7.12* |4.56* |

|Standard Error of the Model |0.33 |0.34 |0.35 |0.34 |0.33 |

|No. Observations |60 |60 |60 |60 |60 |

Note: * Denotes significance at the 1 percent level, ** at 5 percent. Absolute t-statistics are listed in parentheses.

Furthermore, with a view to examine the impact of economic freedom on per capita income in India, study is carried out following an identical procedure (Table 3). The results, by and large, follow the expected lines. To be specific, higher levels of economic freedom lead to higher per capita income across the states, the coefficient of the overall economic freedom index being positive and significant. The findings support the notion of a positive relationship between economic freedom and per capita income. The results for the economic freedom indices for areas 1, 2, and 3 are shown in columns 2, 3 and 4 of table 2, respectively. All the three areas of economic freedom seem to be powerful explanatory variables for per capita income growth. All three areas of economic freedom indices are taken simultaneously to check the robustness of the model as well. As expected, similar results are observed (Table 3, column 5).

Table 3: Relationship between economic freedom index components and per-capita GSDP

| |Level of Per-capita GSDP |

|Variable |1 |2 |3 |4 |5 |

|Economic freedom |0.97* | | |

| |(4.49) | | |

|Economic freedom (Area 1) | |0.57* | |0.52* |

| | |(3.22) | |(3.10) |

|Economic freedom (Area 2) | |0.31* | |0.25** |

| | |(2.43) | |(2.10) |

|Economic freedom (Area 3) | |0.37** |0.28** |

| | |(2.40) |(1.98) |

|Constant |4.05* |4.18* |4.29* |4.29* |4.01* |

| |(48.65) |(55.61) |(78.21) |(75.14) |(45.23) |

|Adjusted R2 |0.24 |0.13 |0.07 |0.07 |0.24 |

|F -Statistics |20.16* |10.34* |5.91* |5.74* |7.26* |

|Standard Error of the Model |0.16 |0.17 |0.18 |0.18 |0.16 |

|No. Observations |60 |60 |60 |60 |60 |

Note: * Denotes significance at the 1 percent level, ** at 5 percent. Absolute t-statistics are listed in parentheses.

6. SUMMARY AND CONCLUSIONS

Economic freedom is considered as one of the major determinants of economic growth and development. A more recent line of research has attempted to explain economic freedom and economic outcomes across cross-temporal and cross-country cases. However, empirical models of sub-national level have ignored the importance of economic freedom in explaining differences in the pattern of economic developments of sub-national jurisdictions. In a federal system like India, economic and political institutions, such as business regulation, taxation, and government spending, differ across state governments just as they do across national governments. This study taking major Indian states into consideration has attempted to examine the impact of economic freedom on the economic growth. The study has not only tested the effect of aggregate economic freedom on economic growth, but also considers how each of the sub-areas of aggregate economic freedom influences economic growth across states.

At this point, a summary of the empirical results regarding the impact of economic freedom on output growth and per capita income of major Indian states is worthwhile. The results clearly indicate that greater economic freedom can ensure greater economic growth and high per capita income across states in India. Low intervention of the government in the free play of market forces can enhance growth and per capita income. Flexible regulations governing credit, labor, and product markets has some impact as well. There is, however, no evidence of the legal structure exerting any impact on output growth, whereas it has a positive effect on per capita income.

Further, the results indicate that political and economic policies ought to be taken up to ensure enhancement of economic freedom. Policies that increase the market economy within the framework of a stable legal system, flexible labour market and minimum government interference need to be formulated across all states. Laggard states need to undertake special measures to ensure improved freedom so that they can catch up with the better performing ones. The current growth trajectory is said to have failed to trickle down to a large section of the economy and suffers from the criticism of ‘inclusiveness’. Given the nature of emerging challenges that the country is experiencing, government should consider increasing economic freedom as a means of higher and inclusive growth.

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ANNEXURE

Table A1: Areas and components of state-level economic freedom in India

|Area Components |

|Area 1: Size of Government—Expenditures, Taxes and Enterprises |

|1) Inverse of Government Revenue Expenditure as a Share of Gross State Domestic Product (GSDP) |

|2) Inverse of Administrative GSDP as a Ratio of Total GSDP |

|3) Inverse of Share of Government in Organised Employment |

|4) Inverse of State Level Taxes on Income as a Ratio of GDP |

|5) Inverse of Ratio of State Level Taxes on Property and Capital Transactions to State GDP |

|6) Inverse of State Level Taxes on Commodities and Services to GDP |

|7) Stamp Duty Rate |

|Area 2: Legal Structure and Security of Property Rights |

|8) Ratio of Total Value of Property Recovered to Total Value of Property Stolen |

|9) Inverse of Violent Crimes as a Share of Total Crimes |

|10) Inverse of Cases under Economic Offences as a Share of Total Cases Registered |

|11) Inverse of Vacant Posts of Judges in the Judiciary as a Ratio of Total Sanctioned Posts of Judges |

|12) Percentage Cases where Investigations were Completed by Police |

|13) Percentage Cases where Trials were Completed by Courts |

|Area 3: Regulation of Labour and Business |

|14) Ratio of Average Wage of Unskilled Workers (Males) to Minimum Wages |

|15) Ratio of Average Wage of Unskilled Workers (Females) to Minimum Wages |

|16) Inverse of Man-Days Lost in Strikes and Lockouts/ Total Number of Industrial Workers |

|17) Implementation Rate of Industrial Entrepreneurs Memorandum (IEM) |

|18) Inverse of Minimum License Fee for Traders |

|19) Inverse of Power Shortage as a Percentage of Total Demand |

|20) Inverse of Pendency Rate of Cases Registered under Corruption and Related Acts |

|21) Persons Arrested as a Share of Total Cases being Investigated under Prevention of Corruption and Related Acts |

Source: Economic Freedom of the States of India 2011

Table A2: Level of economic freedom, growth rate of SGDP and growth rate of per-capita SGDP across major states of India 2009-10

|States |Economic Freedom |Growth Rate of State Domestic |Growth Rate of Per |

| | |Product at Constant(1999-2000) |Capita State |

| | |Prices |Domestic Product at|

| | | |Constant |

| | | |(1999-2000) Prices |

| |Area 1 | Area 2|Area 3 |Overall | | |

|Andhra Pradesh |0.49 |0.56 |0.48 |0.51 |5.79 |4.69 |

|Assam |0.51 |0.18 |0.19 |0.29 |8.08 |6.38 |

|Bihar |0.44 |0.11 |0.15 |0.23 |8.56 |8.00 |

|Chhattisgarh |0.32 |0.52 |0.14 |0.33 |11.93 |10.53 |

|Gujarat |0.69 |0.54 |0.49 |0.57 |10.23 |9.29 |

|Haryana |0.63 |0.45 |0.34 |0.47 |9.95 |8.23 |

|Himachal Pradesh |0.48 |0.42 |0.38 |0.43 |8.12 |3.69 |

|Jammu Kashmir |0.43 |0.32 |0.39 |0.38 |6.48 |5.18 |

|Jharkhand |0.67 |0.24 |0.24 |0.38 |6.58 |4.88 |

|Karnataka |0.36 |0.34 |0.32 |0.34 |4.99 |3.47 |

|Kerala |0.49 |0.34 |0.25 |0.36 |9.73 |9.06 |

|Madhya Pradesh |0.35 |0.62 |0.27 |0.42 |8.49 |6.45 |

|Maharashtra |0.53 |0.19 |0.35 |0.36 |8.68 |7.12 |

|Orissa |0.38 |0.23 |0.31 |0.31 |10.57 |7.27 |

|Punjab |0.54 |0.34 |0.18 |0.35 |7.84 |5.91 |

|Rajasthan |0.44 |0.54 |0.22 |0.40 |3.95 |2.35 |

|Tamil Nadu |0.47 |0.90 |0.41 |0.59 |8.96 |8.21 |

|Uttar Pradesh |0.33 |0.39 |0.30 |0.34 |7.22 |5.21 |

|Uttarakhand |0.25 |0.29 |0.24 |0.26 |10.66 |8.79 |

|West Bengal |0.58 |0.15 |0.25 |0.33 |8.96 |8.19 |

Source: Economic Freedom of the States of India 2011 and Central Statistical Organisation

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[1] Assistant Professor (Economics), School of Humanities, KIIT University, Email: falguni@hss.iitkgp.ernet.in, falgunipattanaik@

[2] Associate Professor, Department of Humanities and Social Sciences, Indian Institute of Technology, Kharagpur, Email: ncnayak@hss.iitkgp.ernet.in

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Freedom to Trade Internationally

Access to Sound Money

Legal Structure and Security of Property Rights

Size of Government: Expenditures, Taxes, and Enterprises

Reduces the costs, both financial and regulatory

Encourages higher levels of entrepreneurial activity and small-business creation

ECONOMIC

GROWTH

ECONOMIC FREEDOM

Regulation of Credit, Labor, and Business

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