THE RELATIONSHIP BETWEEN ECONOMIC FREEDOM PERFORMANCE FACTORS: AN APPLICATION WITH CONFIRMATORY FACTOR ANALYSIS

Abstract

There are various indexes in the international arena that measure the economic freedom performance of countries. Economic freedom performances of countries can be measured with these indexes. According to the indixes, countries can improve their economic freedom performance by carrying out activities that complement each other positively by the economic freedom factors. One of these indexes is the Heritage Institution Economic Freedom Index (HFEFI). In this context, the relations between the economic freedom dimensions of the HFEFI components of a total of 174 countries with complete data in the Heritage Institution Economic Freedom Index (HFEFI) report of 2020 were measured with the Confirmatory Factor Analysis. According to the findings, it was observed that the goodness of fit values of the created model were provided. Subsequently, the correlational density values between HFEFI dimensions were determined as regulatory efficiency, market openness, rule of law and goverment size, respectively. The contribution values of the dimensions to the relational structure are the rule of law (very high), market openness (high), goverment size (medium) and regulatory efficiency. Therefore, it has been concluded that the goverment size and regulatory efficiency structures of the countries should be engaged in activities that will link, concern and ensure each other and other dimensions.