Publication bias in the economic freedom and economic growth literature

The impact of institutions on economic performance has attracted significant attention from researchers, as well as from policy reformers. A rapidly growing area in this literature is the impact of economic freedom on economic growth. The aim of this paper was to explore publication bias in this literature by means of traditional funnel plots, meta-significance testing, as well as by boot-strapping these meta-significance tests. When all the available estimates are combined and averaged, there seems to be evidence of a genuine and positive economic freedom - economic growth effect. However, it is also shown that the economic freedom - economic growth literature is tainted strongly with publication bias. The existence of publication bias makes it difficult to identify the magnitude of the genuine effect of economic freedom on economic growth. The paper explores the differences between aggregate and disaggregate measures of economic freedom and shows that selection effects are stronger when aggregate measures are used.