The Effects of Economic Freedom Components on Economic Growth: An Analysis with A Threshold Model

  •  Hatem DERBEL    
  •  Rami ABDELKAFI    
  •  Ali CHKIR    


Several studies show a positive and significant link between economic freedom and economic growth. Based on this result many economists recommend an abrupt and total disengagement of the State from the economic activity. One of our principal results is that the reduction of the size of the government is not effective in countries having an initial GDP per capita and an enrollment rate in 1990 higher than the thresholds values. This enables us to put into perspective the need for a reduction of the size of the government and to insist on the effectiveness of economic policies in developing countries. 

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