We use a new data set measuring Lockdown Regulatory Freedom to examine the pre-pandemic factors associated with how severely governments locked down their economy in 2020 across a large cross-section of countries. We find that pre-pandemic levels of other economic freedoms and hospital bed capacity relative to population were both associated with less severe lockdown regulations. These associations were both statistically significant and economically meaningful in magnitude. The positive association between other economic freedoms and less severe lockdowns grew in size and significance over the course of the pandemic in 2020. However, despite the statistical and economic significance of our findings, most of the variation in the stringency of international lockdowns remains unexplained and a topic for future research.
This paper empirically examines the impact of emigration to OECD countries on 132 origin countries’ economic institutions, as measured by the economic freedom index. We utilize public choice theory to explore how emigration can affect origin country economic freedom through voice and exit via absence, diaspora, prospect, and return channels. We then estimate the association between accumulated emigrant stocks and the subsequent changes in economic freedom and the association between contemporaneous emigrant flows and changes in economic freedom and investigate how these associations vary by emigrant skill. We find that for all skill levels, larger emigrant stocks are consistently positively associated with larger subsequent improvements in economic freedom but that at high levels of emigrant stocks these improvements diminish.
This article explores the moral permissibility of sweatshop boycotts. We build explicitly on Tomhave and Vopat’s (2018) framework for evaluating the moral permissibility of boycotts in general for the specific case of sweatshop labor. We argue that sweatshop boycotts are more likely to be morally justified when targeting forced labor compared to free labor and we explore the relevant moral tradeoffs associated with boycotts of free labor sweatshops. We analyze the morality of three cases of sweatshop boycotts—Indonesia in the 1990s, Bangladesh following the 2013 Rana Plaza disaster, and the Uyghur region in China—and then discuss how insights from these cases might provide a model to guide activists and business ethicists in analyzing the morality of other sweatshop boycotts.
This article updates a measure of lockdown regulatory freedom for 2021 and adjusts the economic freedom scores of US states-as measured in the Economic Freedom of North America index-to account for how lockdown regulations affected economic freedom. We also use the measure to assess how overall economic freedom evolved from the onset of the COVID-19 pandemic through 2021. When scores are not adjusted for lockdown regulations, average economic freedom across the fifty states appears essentially unchanged from 2019 through 2021. In contrast, our lockdown-adjusted freedom scores reveal that average economic freedom plunged in 2020 and while freedom increased in 2021, the increase was insufficient to offset the substantial decline experienced in 2020.
We create new data set measuring “sweatshop wages” from 2011 to 2019. We then use this data set to compare the living standards provided by sweatshop wages to other alternative living standards in the countries where sweatshops are located. Our main finding is that sweatshop pay compares favorably with widespread poverty living standards in the countries in which sweatshops operate and often even compares favorably with average living standards. This finding has welfare implications for evaluating employment tradeoffs associated with anti-sweatshop activism.
The Covid-19 pandemic in 2020 led to extensive new government regulations and lockdown policies that, according to some prominent definitions, severely reduced economic freedom. However, many of these new pandemic-related regulatory restrictions on economic freedom are largely missed by the Economic Freedom of the World Report (EFW). This paper first adjusts the Our World in Data Covid-19 Stringency Index into a measure of lockdown regulatory freedom and then merges it into the EFW index to better measure countries' 2020 cross-sectional relative economic freedom. We find significant differences in the relative ranking of economic freedom between countries once we adjust for lockdown regulatory restrictions.
Purpose This paper focuses on the problem of knowledge that is difficult to share because it cannot be articulated: intractably tacit knowledge. It offers knowledge sharing between relatives or friends, a nepotistic practice, as a potential solution. Design/methodology/approach Analysis of a US Supreme Court decision in favor of a nepotistic hiring practice provides insights into how such a nepotistic approach can facilitate the sharing of intractably tacit knowledge. The paper builds on this analysis to articulate the conditions under which nepotistic selection can be useful to managers. Findings The US Supreme Court decided in favor of a nepotistic hiring practice based on its potential effectiveness in selecting and developing river pilots. Such a nepotistic approach is problematic, but it can be valuable in a very specific and narrow application, i.e., when organizations need to transfer intractably tacit knowledge. A nepotistic approach should thus be employed only if the benefit of sharing intractably tacit knowledge exceed the cost of nepotism. Organizations should enhance the benefit by ensuring effective knowledge transfer and reduce the cost by mitigating the discrimination and inequity that nepotism enhances. Originality/value While much has been written on tacit knowledge, the portion of tacit knowledge that cannot be articulated has been ignored in some studies and neglected in others. Managers responsible for the sharing of such knowledge need guidance. This paper explores an unusual solution: nepotistic selection.
We investigate the determinants of the severity of U.S. state-level lockdown regulations adopted during the COVID-19 pandemic. We employ a new measure of Lockdown Regulatory Freedom from Miozzi and Powell (Am J Econ Sociol, 2023b. https://doi.org/10.1111/ajes.12512 ) to investigate whether pre-pandemic measures of economic freedom, political variables, and measures of COVID-19 exposure and severity impacted the severity of subsequent lockdowns. Our main finding is that the severity of a state’s lockdown regulations were primarily determined by pre-pandemic levels of economic freedom and pre-existing political ideology, as measured by the share of votes for the 2016 Democrat presidential candidate.
This study investigates the impact of anti-sweatshop activism on garment industry employment and the number of firms in Bangladesh following the 2013 Rana Plaza factory disaster. The disaster led to activism that created two major brand-enforced factory fire and safety agreements. We employ a synthetic control methodology to investigate the tradeoffs associated with the reaction to the disaster and find that it led to 33.3 percent fewer garment factories in Bangladesh by 2016 and 28.3 percent fewer people employed in Bangladesh's garment industry by 2017. Given the importance of the garment industry in Bangladesh's development in providing a pathway out of extreme property, our finding raises important questions about the efficacy of anti-sweatshop activism.
We examine whether aid affects recipient countries' economic freedom. The existing empirical literature examining this relationship has found conflicting results. However, all of these existing studies have struggled to employ plausible identification strategies to find a causal relationship between aid and economic freedom. Our study employs matching methods to better estimate the causal relationship between aid and economic freedom. We find that there is no meaningful causal impact of overall aid on recipient countries' economic freedom. There is some evidence that, specifically, large and sustained increases in "governance-specific" aid lead to increases in economic freedom, but even then the effects appear to be quantitatively modest.
This paper argues that government policies such as lockdowns and command and control regulation of businesses have not efficiently addressed the nature of the COVID-19 externality because these interventions fail to take account of insights from standard price theory about the reciprocal nature of externalities and the allocation of rights such that least cost avoiders adjust behavior. Furthermore these interventions stifled the market’s entrepreneurial adjustment process that partially ameliorates the externalities over time.
A growing empirical literature supports the importance of strong private property rights, a rule of law, and an environment of economic freedom for promoting long-run prosperity. But little is known about how immigration impacts these institutions. This chapter empirically examines how immigration impacts a nation’s policies and institutions. We find no evidence of negative and some evidence of positive impacts in institutional quality, as measured by the economic freedom index, as a result of immigration.
Economic arguments against immigration suggest that immigrants undermine the culture, institutions, and productivity of destination countries. But is that true? Nowrasteh and Powell systematically analyze cross-country evidence and case studies of the potential negative effects of immigration on economic freedom, corruption, culture, and terrorism. They find that immigrants do not destroy the institutions responsible for prosperity and, in some cases, even improve them.
We argue that the policy response to the COVID-19 pandemic by all levels of government around the world is not consistent with recommendations from standard welfare economics. Thus, it is important to ask why such policies have been adopted. That opens the door to examining the political economy of the COVID-19 pandemic. This requires examining the incentives and information that confront policymakers and voters and the institutional environments that shape their incentives and information. This lead article frames questions addressed in the remainder of the symposium.