Examining the Hayek–Friedman hypothesis on economic and political freedom

This paper examines empirically the hypothesis made famous by Nobel Laureates Friedrich A. Hayek and Milton Friedman that societies with high levels of political freedom must also have high levels of economic freedom. In our judgment, the Hayek–Friedman hypothesis holds up fairly well to historical...

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Bibliographic Details
Published inJournal of economic behavior & organization Vol. 74; no. 3; pp. 230 - 239
Main Authors Lawson, Robert A., Clark, J.R.
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.06.2010
Elsevier
Elsevier Sequoia S.A
SeriesJournal of Economic Behavior & Organization
Subjects
Economic freedom
Economic freedom Political freedom Hayek Milton Friedman
Economic theory
Freedom
Freedoms
Friedman, Milton
Hayek
Hayek, Friedrich A
Hayek, Friedrich A. von
Historical analysis
History of economic thought
Hypotheses
International political economy
Judgments
Manycountries
Milton Friedman
Political freedom
Political systems
Politics
Recent economic thought
Scrutiny
Society
Studies
Hayek
Economic freedom
P5
Milton Friedman
O5
Political freedom
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Summary:This paper examines empirically the hypothesis made famous by Nobel Laureates Friedrich A. Hayek and Milton Friedman that societies with high levels of political freedom must also have high levels of economic freedom. In our judgment, the Hayek–Friedman hypothesis holds up fairly well to historical scrutiny. Using data on economic and political freedom for a sample of up to 123 nations back as far as 1970, we find relatively few instances of societies combining relatively high political freedom without relatively high levels of economic freedom. In addition, we find that these cases are diminishing over time. Finally, we examine several cases of countries on different economic and political freedom journeys.
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ISSN:0167-2681
1879-1751
DOI:10.1016/j.jebo.2010.03.006