On the Relationship between Economic and Political Freedom: Quantitative Analysis of the Correlation between the Index of Economic Freedom and the Democracy Index

The question of the ratio of economic and political freedom is considered in this article through the analysis of the actual values of the Index of Economic Freedom (IEF) and the Democracy Index (DI) for 162 countries. Despite the rather high correlation of both indices, the study reveals a signifi cant degree of their variability: there are enough countries that do not quite fi t into the expected model “countries with a high IEF have a high DI, and countries with low IEF — a low DI.” In countries with equivalent IEF values, the values of the DI can vary 2-3 times; likewise, countries with the same DI can vary signifi cantly in IEF. In practice, it is clear that economic freedom does not always require political freedom (United Arab Emirates), and political freedom can be realized in conditions of limited economic freedom (India). A country’s ability to deviate from the expected global trend line is infl uenced by the size of the population and the size of the territory. Among countries that deviate signifi cantly from the trend, a signifi cant proportion are countries with small populations and small territories. As an alternative to the traditional method of analysis, the article proposes an approach that takes into account the size of the population of countries and is based on the recognition that the subject of political and economic freedoms is not a country, but an individual. This approach shows that only 11 % of the population lives in “ free” countries, and the relationship between economic and political freedoms is less obvious than one would expect in theory.

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