Economic Freedom of the States of India, 2011

Economic freedom is a concept used to measure the extent to which governments constrain efficient decision-making and distort resource allocation decisions. It has been used in cross-country literature to show that countries with higher levels of economic freedom have better development indicators. However, sub-national attempts to capture economic freedom are rare, pertinent in a federal country like India, where many factor markets are State subjects under the Seventh Schedule. This pioneering work modifies economic freedom concepts and applies them to India's inter-State setting, not only measuring economic freedom in major States, but also demonstrating links between economic freedom and development.