Human Freedom and Economic Prosperity: Evidence from Eastern Europe
Journal
Visio Journal
Date Issued
2019
Author(s)
Makrevska Disoska, Elena; Shapkova Kocevska, Katerina
Abstract
The main mechanism that relates human freedom to economic growth is channeled through institutional and economic factors, such as government effectiveness, investments, and trade. Therefore,
institutions are an important determinant of economic prosperity in countries worldwide. Institutions
shape human behavior, set the “rules of the game” in society, and reflect the prevailing norms and
values. Both economic science and history have proved that economies and societies flourish in a
market-supportive environment where institutions adhere to personal choice, self-ownership, and the
rule of law.
In this paper, we focus on exploring the fractional effects of institutional changes on economic
growth (measured as GDP per capita) and on productivity (measured as GDP per person employed). We developed ordinary least squares (OLS) panel regression models for selected economies of Eastern Europe, or around 20 cross-section units (countries) in the period between 2008 and
2016. The cross-country regression models demonstrate that institutions presented with human freedom and human capital have the highest influence and are statistically significant determinants of
economic growth and productivity in the selected economies of Eastern Europe.
institutions are an important determinant of economic prosperity in countries worldwide. Institutions
shape human behavior, set the “rules of the game” in society, and reflect the prevailing norms and
values. Both economic science and history have proved that economies and societies flourish in a
market-supportive environment where institutions adhere to personal choice, self-ownership, and the
rule of law.
In this paper, we focus on exploring the fractional effects of institutional changes on economic
growth (measured as GDP per capita) and on productivity (measured as GDP per person employed). We developed ordinary least squares (OLS) panel regression models for selected economies of Eastern Europe, or around 20 cross-section units (countries) in the period between 2008 and
2016. The cross-country regression models demonstrate that institutions presented with human freedom and human capital have the highest influence and are statistically significant determinants of
economic growth and productivity in the selected economies of Eastern Europe.
Subjects
File(s)![Thumbnail Image]()
Loading...
Name
Visio-Journal-4.pdf
Size
580.78 KB
Format
Adobe PDF
Checksum
(MD5):a9951a99a5cc95b36cbf17f987c37fa3