The Freedom Factor: Economic Growth Dynamics in Low and Lower Middle-Income Nations

The Freedom Factor: Economic Growth Dynamics in Low and Lower Middle-Income Nations | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article The Freedom Factor: Economic Growth Dynamics in Low and Lower Middle-Income Nations Fouzia Awan This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-6263349/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This study examines the dynamic relationship between the economic freedom index, comprising five components (Legal System & Property Rights, Freedom to Trade Internationally, Size of Government, Sound Money, and Regulation), and economic growth in low and lower-middle-income countries. The study analyzes contemporaneous and prolonged impacts using Bayesian Panel Vector Autoregression (VAR) and fixed-effect panel regression models with lagged dependent variables. While confirming a positive overall relationship between economic freedom and growth, the findings reveal substantial variation in the dynamic effects of individual components. Specifically, the Legal System and Property Rights and Freedom to Trade Internationally show a strong, positive instantaneous impact. In contrast, the Size of Government shifts from a negative to a positive effect, underscoring the complex and evolving nature of these relationships. Economic freedom of the world Economic Growth institutions Low-income countries Size of government Legal system and Property rights Sound Money Freedom to trade internationally Regulation Full Text Additional Declarations No competing interests reported. Supplementary Files Table9Listofcountries.pdf Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-6263349","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":431164487,"identity":"7e3d1777-42b9-4e13-8d21-be5a9bef2296","order_by":0,"name":"Fouzia Awan","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA0ElEQVRIiWNgGAWjYBAC9gYgkQBlMROlhecATAuQRYIWMJBIIFYLe4/xhwc1h+XNJd8Yfi6osGHgb+9OwK+F54yBQcKxw4Y7Z+cYS884k8YgcebsBrxa7CVyDBIS2G4zbridYyDN23aYwUAiF78WHqCWAwn/bttvuHnG+DexWgwbEttuJ264wWNGpC08x4oZEvv+J284k1ZmzXMmjYegX3jYmzd//PEtzXbD8cObb/NU2Mjxt/fi14IEOAzAZhCrHATYH5CiehSMglEwCkYQAADCVkdrpmi6fQAAAABJRU5ErkJggg==","orcid":"","institution":"Western Washington University","correspondingAuthor":true,"prefix":"","firstName":"Fouzia","middleName":"","lastName":"Awan","suffix":""}],"badges":[],"createdAt":"2025-03-19 16:23:17","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-6263349/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-6263349/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":83315629,"identity":"2722b92e-2112-4412-9440-2c36c16c9235","added_by":"auto","created_at":"2025-05-23 00:31:21","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":782049,"visible":true,"origin":"","legend":"","description":"","filename":"AwanManuscriptEFWGrowth.pdf","url":"https://assets-eu.researchsquare.com/files/rs-6263349/v1_covered_4f4d161b-4252-46e6-b2e9-11cad2bbcea9.pdf"},{"id":78933711,"identity":"489c140c-07aa-45db-9add-efaaf54f2f18","added_by":"auto","created_at":"2025-03-21 03:58:59","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"supplement","size":62726,"visible":true,"origin":"","legend":"","description":"","filename":"Table9Listofcountries.pdf","url":"https://assets-eu.researchsquare.com/files/rs-6263349/v1/f4f803af8dc6dac94c056fcd.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"The Freedom Factor: Economic Growth Dynamics in Low and Lower Middle-Income Nations","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":true,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":" Economic freedom of the world, Economic Growth, institutions, Low-income countries, Size of government, Legal system and Property rights, Sound Money, Freedom to trade internationally, Regulation","lastPublishedDoi":"10.21203/rs.3.rs-6263349/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-6263349/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"This study examines the dynamic relationship between the economic freedom index, comprising five components (Legal System \u0026 Property Rights, Freedom to Trade Internationally, Size of Government, Sound Money, and Regulation), and economic growth in low and lower-middle-income countries. 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