Regulation, investment, and growth across countries

Numerous studies have explored the relationship between eco-nomic freedom and long-run economic growth across countries.1 One particular aspect of economic freedom that has received relatively little attention in the empirical growth literature, how-ever, is the extent of government regulation. Determining the im-pact of regulation on cross-country economic performance has been virtually impossible because of the inherent difficulties in measuring the scope of regulation across countries. While a few studies investigate various aspects of specific regulations, none are able to assess the importance of a comprehensive measure of regu-lation on long-run economic performance in a large sample of coun-tries.