n Studies in Economics and Econometrics - An econometric analysis of the impact of economic freedom on economic growth in the SADC

Volume 35, Issue 2
  • ISSN : 0379-6205


The SADC is attempting to achieve development and economic growth. By improving economic freedom, a country can experience sustained economic growth without increasing fundamental inputs i.e. labour and capital. This study tests the effects of population growth, openness and economic freedom on economic growth as well as the causality between economic freedom and economic growth. A panel data model is used due to the lack of data for individual SADC countries. The fixed effects model is statistically significant and allows county-specific differences, arising from independent variables, to be measured. Results reveal that population growth positively affects economic growth although it is not significant. Openness is positively related to economic growth. However, the magnitude of this openness relationship is relatively small. Economic freedom has a significantly favourable effect on economic growth, stronger than that of openness. The Granger causality test confirms the direction of causality, economic freedom precedes economic growth.

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