Institutions as predictors of government discrimination

Exclusion of some groups caused by the misuse of government power remains a major problem across the world. We propose that market-oriented institutions and policies have the capacity to reduce such exclusion. To test this, we use an overall measure derived from the V-Dem dataset, capturing government discrimination based on political group, social group, socio-economic group, and gender, which we combine with the Fraser Institute's Economic Freedom of the World index. The sample consists of 153 countries for 1970–2020, which we organize in a panel consisting of consecutive, non-overlapping 5-year periods, rendering up to about 1,200 observations. Our estimates show a clear negative association between the rule of law and government discrimination in electoral democracies and electoral autocracies but not in single-party autocracies. There are, however, reasons for not considering the finding for electoral autocracies causal. Two further areas of economic freedom seem to matter: free trade is negatively related to government exclusion in electoral democracies, while regulatory freedom is so in both types of autocracies. Thus, it seems as if a market-economic system may be able to constrain public officials in the direction of non-discrimination.