The Relationship between Economic Liberalisation and Growth for the Central Asian Republics

With the increase in globalization, the liberalisation tendencies have appeared on countries’ economic policies as well as at other areas. The countries have performed liberalisation in almost all the areas of economy by increasing their economic growth. Economic liberalisation movements have especially intensified on foreign trade and finance. The aim of this paper is to exhibit the relationship between economic liberalisation and economic growth for the Central Asian Republics. There are few studies that examine the relationship between economic liberalisation and growth for the Central Asian Republics. In this paper, the relationship between economic liberalisation and economic growth has been tested for 1998-2011 period on the six Central Asian Republics which are Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. Nine variables about economic liberalisation have been taken into account in the analysis. We reached two main results. Firstly, the countries have high index scores in terms of business freedom, trade freedom, fiscal freedom, government size and monetary freedom, while they have low index scores in terms of investment freedom, financial freedom, property rights, freedom from corruption. Secondly, there is no long-term relationship between economic freedom and growth for all countries. The available relations that we found out are short-term character.