Economic Freedom and Conflict: An Empirical Note

This paper further explores the relationship between economic freedom, political institutions, and conflict. We do so in two ways. First, we use a relatively new measure of peace, which measures the degree to which a country is currently engaged in both internal and external conflicts. Second, most of the literature measures democracy using the standard Polity IV data. Here we look specifically at protection of civil liberties by the government. When governments are limited and protect civil liberties of their citizens, they should be less likely to go to war with other nations or to foster internal conflict. According to our findings, countries with higher levels of economic freedom, other things equal, also have lower levels of external and internal conflict. In addition, we find a statistically significant relationship between the degree of civil liberty protection in a country and conflict. Our preliminary findings provide further evidence of the negative relationship between economic freedom and conflict (or positive relationship between economic freedom and peace) as well as suggest some avenues for future research as more data becomes available.

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