Does Economic Freedom Bolster Economic Performance?

Author: Baneng Naape

Received: August 4, 2023 | Revised: November 4, 2023 | Accepted: November 8, 2023

Abstract

In recent times, endogenous factors such as institutional quality and economic liberty have become prerequisites for economic growth and development. As such, evidence on the association between unconventional growth determinants and national income is crucial for informed policymaking. Against this backdrop, the focus of this study is to explore the bivariate relationship between economic liberty and economic growth in the Southern African Development Community (SADC) region. Given the characteristics of the variables, the study made use of the Panel Estimated Generalized Least Squares technique and Granger causality analysis. The study established the presence of a positive and robust association between components of economic liberty and economic growth. This implies that less government interference in the economic and financial system as well as the absence of tariff and non-tariff barriers, bolster economic growth at least in the SADC region. Furthermore, findings from the Granger causality analysis revealed that economic liberty and economic growth are jointly determined. In light of the above positive findings, there exists a need to deepen regional integration among SADC member states through increased intra-regional trade and financial integration, identifying potential value chains and implementing both hard and soft infrastructure to reduce the cost of doing business.

Keywords: economic freedom, economic growth, SADC, panel EGLS



Cite this article as:

Naape, B. (2023). Does Economic Freedom Bolster Economic Performance? Review of Socio-Economic Research and Development Studies, 7(2), 1-13.