Economic liberalization, political regimes and ideology

Abstract

This paper assesses how economic freedom is affected by the ideological stance, being the first to analyse the role of dictatorial regimes and their ideological orientations. Using annual data for 145 countries over the period 2000-2017 and a two-step system GMM estimator, this study finds that democracies do promote more economic freedom than authoritarian regimes, but not in all circumstances The probability that economic liberalization is promoted is higher for right-wing dictatorships than for other autocracies and comparable to other types of democratic ruling, with the exception of right-wing democratic governments that strongly benefit liberalization. These right-wing governments, alongside (the negative effect of) non-right-wing dictatorships, seem to be the main contributors to explaining why democracies in recent years are promoting more economic liberalization than autocracies. Additionally, our results suggest that democratic governments not ideologically identifiable seem to share a common dislike for policies that promote liberalization.