1. Geography and Economic Freedom Matthew E. Brown

2. Economic Freedom How is it measured? 1.Size of Government: Expenditures, Taxes, and Enterprises 2.Legal Structure and Security of Property Rights 3.Access to Sound Money 4.Freedom to Exchange with Foreigners 5.Regulation of Credit, Labor, and Business

3. Economic Freedom and Income

4. Economic Freedom and Growth

5. Does Size Matter? Why would it? –Theory Alesina, Bauer Size Measures –Land Area –Population

6. R² -.000 Coefficient - -7E09 P-Value –.869 Observations - 128 Source: CIA World Factbook

7. R² -.090 Coefficient - -1.2E06 P-Value –.002 Observations - 108

8. Source: World Bank Human Development Index R² -.002 Coefficient - -3E10 P-Value –.626 Observations - 129

9. Which Other Geographic Factors Matter? Source: Diamond, Jared M. “Peeling the Chinese Onion.” Nature Vol. 391, pp. 433-434. January 29, 1998.

10. Other Geographic Variables Exitability (Total Boundaries/Total Area) Coastalness (Coastline/Total Area) Latitude (Control Variable)

11. Exitability (Total Boundaries/Total Area) Theory

12. R² -.055 Coefficient - -2E08 P-Value –.015 Observations - 107 R² -.103 Coefficient - 3.688 P-Value –.000 Observations - 128 Source: CIA World Factbook

13. Coastalness (Coastline/Total Area) Theory

14. R² -.094 Coefficient - 3.523 P-Value –.000 Observations - 128

15. R² -.112 Coefficient - 3.346 P-Value –.000 Observations - 105

16. Source: CIA World Factbook R² -.167 Coefficient - 18.343 P-Value –.052 Observations - 23

17. How does geography affect EFW sub-sectors? Sub-sectors 1.Size of Government: Expenditures, Taxes, and Enterprises 2.Legal Structure and Security of Property Rights 3.Access to Sound Money 4.Freedom to Exchange with Foreigners 5.Regulation of Credit, Labor, and Business

18. Source: CIA World Factbook

21. Relative Importance of Geographic Factors Multiple Regression –Land Area –Population –Exitability –Shape Factor –Percentage of Arable Land –Latitude

23. Conclusion Geography affects Economic Freedom Economic Freedom affects Growth