ABSTRACT
This chapter attempts to contribute to our understanding of these institutional changes by empirically analyzing the dynamic properties present in the Economic Freedom of the World data for countries undergoing major transitions. It focuses on trade policy as a first step has theoretical merit drawn from the previous literature on institutional reform. The data point to several conclusions that may help to advance future research in this area. First, there is clear evidence that institutional decline happens more rapidly and abruptly than institutional improvement. When one speaks of major institutional changes, this obviously means a degree of reform that is significantly larger than normal policy variation. The skewness of the distribution also means that what is a "big," or significant, change differs for declines and increases in the data. Also interestingly, one area of concern is the recent decline in economic freedom in the United States.
