Further evidence on the relationship between economic freedom and economic growth

Often it is maintained that economic freedom may further high levels of economic growth. Using various measures of economic freedom constructed by Scully and Slottje, the robustness of this relationship is examined. Both direct and indirect effects of lack of liberties are analysed. Our main conclusion is that the link between economic freedom and economic growth depends upon the measure used: for some indicators of economic freedom there appears a robust direct relationship, while for others there is no such relationship. Investment is not related to our indicators for economic freedom.