Bayesian Time-Series Analysis on Retreating Economic Freedom: Is There a Democratic Crisis of Liberalism?

This study examines the dynamics of economic freedom in nine advanced democracies in comparison to China over the 1970–2022 period. Using data from the Fraser Institute and the Manifesto Project Database, we apply a Bayesian time-series methodology to identify three key patterns. First, economic freedom in China has exhibited a sustained increase since the 1980s. Second, by contrast, liberal democracies in advanced economies show a decline in economic freedom since the turn of the millennium. Third, evidence from party manifestos indicates a rising prevalence of de-growth-oriented political preferences in democratic economies over the past decade. As a potential avenue for future research, we propose framing economic freedom as a public good, in line with Hayekian principles. Overall, the study provides a descriptive foundation of the relationship between economic freedom, political preferences, and economic performance.