ABSTRACT
By analysing a panel of 76 developed and developing countries for period 1980–2014, this paper provides new evidence about the relation between economic freedom and income distribution, measured through decile income shares. The results show that a higher degree of economic freedom has a negative impact on the first eight deciles; conversely, it favours the richest percentiles and, especially, the top 10% and 5%. While the results aim at reopening an old debate with new evidence, the paper calls for more accurate studies that estimate the effects that each subcomponent of economic freedom may have on income inequalities.
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Notes
1 More details are available in Lahoti, Jayadev, and Reddy (Citation2016) and here: http://gcip.info/.
2 See Škare and Stjepanovic (Citation2014) for a review.
3 The results of these alternative specifications and estimation methods are available upon request.