Does Economic Freedom Influence Economic Growth? Evidence from Latin America
Bibliographic record
Abstract
This paper investigates the relationship between economic freedom and economic growth in Latin America and the Caribbean over the period 1997–2023, using data from 14 countries. To capture the multidimensional nature of economic freedom, two widely recognized indices—Heritage and Fraser—are incorporated into an extended Solow-type growth model. The empirical strategy relies on a dynamic panel data approach using the Arellano–Bond estimator, which allows for the control of unobserved heterogeneity, autocorrelation, and potential reverse causality. Robustness is assessed through alternative model specifications and in-sample forecasting using rolling-window techniques and Theil’s U-statistic. The results reveal a negative and statistically significant relationship between economic growth and the Heritage Index, while the Fraser Index shows a positive but generally non-significant effect. These findings highlight the methodological sensitivity of the economic freedom–growth nexus and suggest that context-specific institutional factors may shape how liberalization policies translate into development outcomes. The study contributes to the literature by jointly evaluating the impact of both indices in a unified dynamic framework, providing new evidence for a region marked by institutional heterogeneity and growth volatility.
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.000 | 0.000 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.000 | 0.000 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.000 | 0.001 |
| Open science | 0.001 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one teacher head, not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".