DO ‘LABOUR’ COUNCILS LOWER ECONOMIC FREEDOM?

Using a panel of the UK counties, spanning the period 2010-2016, this study explores whether having a Labour or Conservative council affects a county’s economic freedom. Due to data unavailability of any economic freedom index for the UK counties, the analysis employed direct measures in relevance to three sub-components of economic freedom, i.e. size of government, sound money and the freedom to trade internationally. Using a regression discontinuity approach, we find strong evidence that the political ideology of a council affects all three sub-components of economic freedom. An implication of this result is that councils appeal to specific groups of voters when making policy