Date of Publication
7-2023
Document Type
Master's Thesis
Degree Name
Master of Science in Economics
Subject Categories
Economics | Political Science
College
School of Economics
Department/Unit
Economics
Thesis Advisor
Lawrence Dacuycuy
Defense Panel Chair
Dickson Lim
Defense Panel Member
Anne Marie Go
Christopher Cabuay
Madeleine Estabillo
Abstract/Summary
The question of whether political freedom promotes economic growth and development has policy implications for developing countries, given the cost of institutional change. While democracies tend to achieve higher growth, previous empirical research has not been conclusive on this question. This paper extends the literature by first constructing a dynamic linear panel model to identify the impact of political freedom on economic output while controlling for GDP dynamics. This approach is complemented by a system of equations model that relates political freedom to economic output through economic institutions and estimating its indirect impact using three-stage least squares (3SLS). The findings indicate that political freedom positively impacts economic institutions and economic output when measured as a stock of democratic experience, promoting long-run economic growth. These effects also vary when interacted with natural resource dependency and regional factors, with a statistically significant positive effect for resource-poor countries. Overall, democracy and political freedom do enhance growth when promoted alongside a development strategy that also builds key economic institutions such as property rights.
Abstract Format
html
Language
English
Format
Electronic
Keywords
Economic development—Political aspects— Developing countries
Recommended Citation
Mercado, M. A. (2023). The impact of political freedom on economic growth: An analysis using system estimation and linear dynamic panel estimation. Retrieved from https://animorepository.dlsu.edu.ph/etdm_econ/5
Upload Full Text
wf_yes
Embargo Period
8-6-2024
