Published on October 2021 | Economics

Does a free market system reduce conflict in Africa?

This study examined the relationship between economic freedom and conflict in Africa between 1985 and 2017. Unbalanced data of 54 African countries were employed to test the hypothesis about the impact of economic freedom on conflict. We used the Pooled OLS, fixed-effect, random-effect, and generalized method of moment (GMM) techniques to estimate the models. Based on countries’ classification by level of economic freedom, the findings from this study show that economic freedom mitigates conflict except in the classifications of most and moderately free economies. Political institution measured by political rights and civil liberties worsens conflict incidence, while a lower corruption scale reduces conflicts. The results show that there exist complementary interactive effects of economic freedom and measures of political institutions on internal conflicts in Africa. This study concluded by emphasizing the need for African governments to improve economic freedom (i.e. increasing international trade) as well as strengthening democratic institutions in the region.