Contingencies in the relationship between economic freedom and human development

The role of generalized trust

Research output: Contribution to journalArticleScientificpeer-review

Abstract

An increasing volume of literature has shown that human development is related to economic institutions. But previous literature has not considered that the effects of economic institutions on human development are contingent on culture. In this study, we contend that the effects of economic freedom (as an indicator of economic institutions) on human development are dependent on generalized trust (as an indicator of culture). Using panel analysis on a sample of 29 OECD countries during 1990–2015, we find that generalized trust positively moderates the relationship between economic freedom and human development. The policy implication is that free market institutions foster human development only in high trust societies, not in low trust countries.
Original languageEnglish
JournalJournal of Institutional Economics
DOIs
Publication statusE-pub ahead of print - Nov 2019

Fingerprint

Contingency
Economic freedom
Human development
Economic institutions
Free market
Panel analysis
OECD countries
Policy implications

Keywords

  • economic freedom
  • human development
  • interaction
  • generalized trust

Cite this

@article{1eb2971e760e4b06b4375fb167ab0a63,
title = "Contingencies in the relationship between economic freedom and human development: The role of generalized trust",
abstract = "An increasing volume of literature has shown that human development is related to economic institutions. But previous literature has not considered that the effects of economic institutions on human development are contingent on culture. In this study, we contend that the effects of economic freedom (as an indicator of economic institutions) on human development are dependent on generalized trust (as an indicator of culture). Using panel analysis on a sample of 29 OECD countries during 1990–2015, we find that generalized trust positively moderates the relationship between economic freedom and human development. The policy implication is that free market institutions foster human development only in high trust societies, not in low trust countries.",
keywords = "economic freedom, human development, interaction, generalized trust",
author = "Johan Graafland",
year = "2019",
month = "11",
doi = "10.1017/S1744137419000705",
language = "English",
journal = "Journal of Institutional Economics",
issn = "1744-1374",
publisher = "Cambridge University Press",

}

TY - JOUR

T1 - Contingencies in the relationship between economic freedom and human development

T2 - The role of generalized trust

AU - Graafland, Johan

PY - 2019/11

Y1 - 2019/11

N2 - An increasing volume of literature has shown that human development is related to economic institutions. But previous literature has not considered that the effects of economic institutions on human development are contingent on culture. In this study, we contend that the effects of economic freedom (as an indicator of economic institutions) on human development are dependent on generalized trust (as an indicator of culture). Using panel analysis on a sample of 29 OECD countries during 1990–2015, we find that generalized trust positively moderates the relationship between economic freedom and human development. The policy implication is that free market institutions foster human development only in high trust societies, not in low trust countries.

AB - An increasing volume of literature has shown that human development is related to economic institutions. But previous literature has not considered that the effects of economic institutions on human development are contingent on culture. In this study, we contend that the effects of economic freedom (as an indicator of economic institutions) on human development are dependent on generalized trust (as an indicator of culture). Using panel analysis on a sample of 29 OECD countries during 1990–2015, we find that generalized trust positively moderates the relationship between economic freedom and human development. The policy implication is that free market institutions foster human development only in high trust societies, not in low trust countries.

KW - economic freedom

KW - human development

KW - interaction

KW - generalized trust

U2 - 10.1017/S1744137419000705

DO - 10.1017/S1744137419000705

M3 - Article

JO - Journal of Institutional Economics

JF - Journal of Institutional Economics

SN - 1744-1374

ER -