DO ‘LABOUR’ COUNCILS LOWER ECONOMIC FREEDOM?
Using a panel of the UK counties, spanning the period 2010-2016, this study explores
whether having a Labour or Conservative council affects a county’s economic freedom.
Due to data unavailability of any economic freedom index for the UK counties,
the analysis employed direct measures in relevance to three sub-components of
economic freedom, i.e. size of government, sound money and the freedom to trade
internationally. Using a regression discontinuity approach, we find strong evidence
that the political ideology of a council affects all three sub-components of economic
freedom. An implication of this result is that councils appeal to specific groups of
voters when making policy.
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Buletin Ekonomi Moneter dan Perbankan / Bulletin of Monetary Economics and Banking is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.