The Determinants of Economic Freedom

Public choice theory suggests how vote-buying policies of politicians lead to reduced economic freedom and how political opposition limits their ability to do so. The political process leads to equilibrium levels of economic freedom consistent with countries’ culture, history and institutions, which can be changed substantially by the evolution of new paradigms about the role of government in the economy and society. Strong political leaders, international organizations and financial institutions often drive policy reforms implied by the new paradigms. The existence of these determinants of economic freedom is consistent with the historic record of several countries and of Greece and Georgia in particular