Do Pro-Market Economic Reforms Drive Human Rights Violations? An Empirical Assessment, 1981-2006

PUBLIC CHOICE 155.1-2 (2013): 163-187

Abstract: Liberals argue that economic policy reforms will benefit most in terms of better access to goods, less inflation and better economic opportunities. Critics of market reforms, among them Marxists, critical theorists, skeptics of globalization as well as a large portion of the NGO community, see the majority as losers from such reform, expecting resistance that would lead to political repression. They suggest that free-market policy reforms are analogous to swallowing the bitter pill. The authors make use of the change in the Index of Economic Freedom as a measure of market liberalizing reforms, employing data from a panel of 117 countries for the period from 1981–2006. Their results show a strong positive association between reforms towards more free markets with regard to governments’ respect for human rights, controlling for a host of relevant factors, including the possibility of endogeneity. The results are robust in relation to sample size, alternative data and methods, and a sample of only developing countries; and they are substantively quite large. The authors’ results support those who argue that freer markets generate better economic conditions and higher levels of social harmony and peace, and it seems as if getting there is less problematic than people generally think—in fact, halfhearted measures and backsliding that prolong crises could be more dangerous to human rights.