EU Accession and Economic Freedom : An Empirical Analysis of the Effect of EU Membership and Its Antecedents on Economic Freedom

The access to European Union and the status of EU membership require significant reforms in order for a country to align with the Union’s overall institutional framework and values. However, the recent financial and sovereign debt crises have called into question the European Union’s commitment to economic freedom. This political debate about the role of European Union must be informed by facts. In light of this, the study seeks to examine whether a trajectory towards EU membership is a driver for more economic freedom. Empirical evidence shows of a link between the EU accession process and the aim of promoting economic freedom. The analysis finds that the process of convergence is associated with more economic freedom and that this effect is deduced from a comparison with not only poorer and less developed countries in the EU neighbourhoods, but also with wealthy non-EU OECD countries. The main channel of this relationship is free trade, which benefits both accruing to accession candidates and full members. Moreover, the study highlights that inflation and monetary stability along with the opening of both domestic and international markets and regulatory harmonization are associated with the policies that European governments implemented to converge towards the Euro currency. The analysis of the index of the economic freedom of the Italian regions, (ILERI) a measurement developed by the Centro Einaudi, demonstrates large and also widening divergence between territorial areas of the country. Some of them are historically known, while new ones developed from 2000 onwards, in spite of the extensive cohesion policies deployed in this period