A new empirical field of research in economics shows that policies characterized by economic freedom produce economic growth. quot;Economic freedomquot; means such things as a small government, protection of private property, a well-functioning legal system, free competition and few regulations....

This chapter provides a critical overview of the state of the art in the economics literature on structural reforms. It takes stock of theoretical developments, measurement efforts and of the econometric evidence. We start with a simple theoretical framework for the relationship between...