The Impact of Economic Freedom on State Legitimacy

282 Pages·2018·10.427 MB·English

by  Christoph Michael Hindermann

Wirtschaft und Politik
Christoph Michael Hindermann
The Impact of
Economic Freedom
on State Legitimacy
An Empirical Investigation
Wirtschaft und Politik
Reihe herausgegeben von
G. Wegner, Erfurt, Deutschland
G. Mehlkop, Erfurt, Deutschland
A. Brodocz, Erfurt, Deutschland
Die Schriftenreihe „Wirtschaft und Politik“ vereint empirisch wie theoretisch
orientierte Forschungsarbeiten aus der Volkswirtschaftslehre, Politikwissen-
schaft und politischen Soziologie, die Fragen der Wirtschaftspolitik und Insti-
tutionenökonomie sowie der Konstitution und dem Wandel ökonomischer und
politischer Ordnungen thematisieren. Darunter fällt insbesondere die Behandlung
politischer Themen mittels ökonomischer Erklärungsansätze und umgekehrt die
Auseinandersetzung mit ökonomischen Phänomenen aus Sicht der Politikwissen-
schaft oder der Soziologie.
The series “Economy and Politics” combines empirically and theoretically ori-
ented research from the fields of economics, political science and political soci-
ology, which analyzes issues of economic policy and institutional economics as
well as the constitution and the change of economic and political orders. This
includes, in particular, the treatment of political issues by means of economic
approaches and, conversely, the examination of economic phenomena from the
perspective of political science or sociology.
Weitere Bände in der Reihe http://www.springer.com/series/16152
Christoph Michael Hindermann
The Impact of Economic
Freedom on State
Legitimacy
An Empirical Investigation
With a preface by Prof. Dr. Gerhard Wegner
Christoph Michael Hindermann
Erfurt, Germany
Dissertation der Universität Erfurt, 2018
ISSN 2524-5945 ISSN 2524-5953 (electronic)
Wirtschaft und Politik
ISBN 978-3-658-23194-1 ISBN 978-3-658-23195-8 (eBook)
https://doi.org/10.1007/978-3-658-23195-8
Library of Congress Control Number: 2018951592
Springer Gabler
© Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2018
This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part
of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations,
recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission
or information storage and retrieval, electronic adaptation, computer software, or by similar or
dissimilar methodology now known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this
publication does not imply, even in the absence of a specific statement, that such names are exempt
from the relevant protective laws and regulations and therefore free for general use.
The publisher, the authors and the editors are safe to assume that the advice and information in this
book are believed to be true and accurate at the date of publication. Neither the publisher nor the
authors or the editors give a warranty, express or implied, with respect to the material contained
herein or for any errors or omissions that may have been made. The publisher remains neutral with
regard to jurisdictional claims in published maps and institutional affiliations.
This Springer Gabler imprint is published by the registered company Springer Fachmedien Wiesbaden
GmbH part of Springer Nature
The registered company address is: Abraham-Lincoln-Str. 46, 65189 Wiesbaden, Germany
To Amalia
Acknowledgments
This thesis was written at the University of Erfurt during the years 2014 to 2017. My
deep gratitude goes first to my supervisor Professor Dr. Gerhard Wegner who provided
me not only with the opportunity to work at his chair, I also greatly benefited from his
expertise and his highly valuable comments for completing this thesis. My
appreciation also extends to my colleagues at the faculty. This refers to Robert Fritzsch
who inspired me with his deep knowledge about political economy and his readiness
to discuss matters and to Professor Dr. Guido Mehlkop and Dr. Fabian Kleine who
offered me statistical advice. In addition, I also want to thank the Röpke Institute
which has always been a forum to present and to discuss this thesis in front of
distinguished experts. Thanks to my mother, my father, my brother, and my sister.
Christoph M. Hindermann
Preface
The present study opens the new series “Economy and Politics” which combines
empirically and theoretically oriented research from the fields of economics, political
science, and political sociology. This includes, in particular, the treatment of political
issues by means of economic approaches and, conversely, the examination of
economic phenomena from the perspective of political science or sociology. The
dissertation by Christoph Hindermann is, in a sense, exemplary for the new series, as it
examines a topic that was previously reserved for qualitative sociological reflections.
In his study, the author applies methods that are used primarily in economic theory and
empirical social research. He enters new scientific territory by analyzing the influence
of economic freedom on the legitimacy of states. Empirical research on the legitimacy
of states is by itself still an emerging branch of research within political science and
sociology, which has so far been reluctant to penetrate the disciplines. The author
builds on this empirical research and extends it to the question of the influence of
economic freedom, thereby abandoning speculative considerations of normative
political theory that have long dominated social philosophy or political theory. These
qualitative reflections include, for example, the question of whether democracies
promote the legitimacy of political orders or whether capitalism undermines or
reinforces their legitimacy. Typically, such analyses are characterized by overall
considerations, in which the question of legitimacy is discussed from the perspective
of a representative citizen. The scientific value of the present study is based on the fact
that the author undertakes a well-founded empirical analysis, which aims at explaining
state legitimacy based on the characteristics of countries and their individuals. Such an
approach already promises a high yield of knowledge. Since data for the measurement
of economic freedom are available and the measuring methods have matured in the
meantime, the author can combine two strands of empirical research: Surveys to
measure economic freedom and surveys to measure the legitimacy of states. Instead of
examining the impact of economic freedom on legitimacy directly, the author chooses
an indirect approach by first measuring determinants of the legitimacy of a political
order and then, in a second step, examining whether indicators or sub-indicators of
economic freedom exert an additional causal influence. While some results of the work
confirm previous research, the author also comes to surprising and unexpected new
findings, such as the negative influence of the Human Development Index on state
legitimacy. It is desirable that the result of the present work resonate both in empirical
social theory as well as in qualitative political theory.
Gerhard Wegner
Contents
List of Figures
List of Tables
Abbreviations
1 Introduction 1
2 The Concept of Legitimacy 7
2.1 The Object of Legitimacy 8
2.2 The Subject of Legitimacy 9
2.3 The Perspectives of Legitimacy 10
2.3.1 The Macro Perspective 10
2.3.2 The Micro Perspective 12
2.4 The Dimensions of Legitimacy 15
2.4.1 Derivation of the Dimensions of State Legitimacy 16
2.4.2 Aggregation Strategy 25
2.5 Summary 28
3 Legitimacy and its Measurement: A Literature Overview 31
3.1 The Measures of Legitimacy 31
3.2 Data Sources 36
3.2.1 Data Sources for Attitudes 36
3.2.2 Data Sources for Behavior 40
3.3 Measurement 41
3.3.1 Unidimensional Measurement Approaches 41
3.3.2 Multidimensional Measurement Approaches 45
3.4 Summary 61
4 The Determinants of Legitimacy: Concepts and Literature Overview 63
4.1 Input, Output, and Throughput Legitimacy 63
4.1.1 The Basic Concept: Input and Output Legitimacy 63
4.1.2 Adding Throughput Legitimacy 68
4.1.3 Other Classifications of Legitimacy’s Determinants 69
XII Contents
4.2 Variables to Address Legitimacy 74
4.2.1 System-Level Variables 75
4.2.2 Individual-Level Variables 92
4.3 Summary and Outlook 95
5 The Determinants of Legitimacy: A Basic Model 97
5.1 A Basic Model at the System Level Based on Gilley’s Legitimacy Scores 98
5.1.1 Methodological Issues 99
5.1.2 Results 105
5.2 Norris’ Legitimacy Scores – An Alternative Legitimacy Measure 123
5.2.1 Robustness of the Basic Model: OLS Estimates 124
5.2.2 Robustness of the Basic Model: Multi-Level Analysis 127
5.3 Summary of the Basic Model 138
6 Economic Freedom and Legitimacy 141
6.1 The Concept of Economic Freedom 143
6.1.1 Definition of Economic Freedom 143
6.1.2 Economic Planning Versus Economic Freedom 144
6.1.3 Economic Freedom as Individual Responsibility 145
6.2 Areas of Economic Freedom: Theory and Measurement 147
6.2.1 The First Area: Legal System and Property Rights 149
6.2.2 The Second Area: Size of Government 155
6.2.3 The Third Area: Sound Money 160
6.2.4 The Fourth Area: Freedom to Trade Internationally 163
6.2.5 The Fifth Area: Regulation 166
6.2.6 Summarizing the Hypotheses 170
6.2.7 Alternative Arguments 172
6.2.8 Summary 173
6.3 Empirical Investigations at the Country Level 174
6.3.1 Methodological Issues 174
6.3.2 Results 178
6.3.3 Summary and Discussion of the Results 192