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The Impact of Economic Freedom on Economic Growth in the SADC: An Individual Component Analysis

Vsevolod I. Gorlach and Pierre Le Roux
Publication date
January 2013

The SADC is attempting to achieve development and economic growth. This paper investigates the relationship between economic freedom – in aggregate and on an individual component basis – on economic growth in the SADC. The annual data for 13 SADC countries from 2000 to 2009 are used to construct a generalised method of moments, dynamic panel-data model. When cross-sectional dependence of the error term, individual- and time-specific effects are controlled, economic freedom and GDP per capita are positively related and freedom Granger-causes growth. All five individual components are highly significant and are positively related to growth; however, the magnitude of the elasticity parameters varies. The causality among the individual freedom components indicates that linkages exist between certain of these components.

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Series title
Working paper 327
J.Stud.Econ.Econometrics, 2015
JEL classifications