IESET.
Hypotheses·institutional quality·freiburg_strong_state_independent_central_bank_synergy_panel

Across countries 1996-2022, the joint condition of high rule-of-law (WGI RL) and high de-jure central-bank independence (proxied by Fraser-EFW area-3 sound-money sub-component plus institutional rules) predicts simultaneously lower mean inflation AND lower output volatility than either single condition alone.

The Freiburg "strong state plus independent central bank" doctrine is that the two pillars are interactive: a rule-bound state needs a rule-bound monetary authority, and the combined regime is more than the sum of its parts. The test is a panel interaction term on the WGI-RL x EFW-area-3 product against twin outcomes (CPI inflation, GDP-growth volatility).

PARTIALengine/runs/freiburg_strong_state_independent_central_bank_synergy_panel

PARTIAL — coef=+0.8817, p=0.697 (above α=0.05); direction inconclusive

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

In plain terms, this asks whether wgi rule of law is actually linked to better or worse cpi inflation annual from 1996 to 2022.

plain answer

The evidence is suggestive but not decisive. coef=+0.8817, p=0.697 (above α=0.05); direction inconclusive

why it matters

This matters because institutional quality claims should change belief only when they survive a pre-declared empirical test.

how the test works

It compares 48 country or place units from 1996 to 2022, using a panel fe design, with fixed effects for country and year.

what was measured
What changed
  • Wgi rule of law
  • Efw sound money area3
What we checked
  • Cpi inflation annual
  • Income growth volatility 5yr
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/freiburg_strong_state_independent_central_bank_synergy_panel
1007550250199620092022ARGAUSAUTBELBRACANCHE
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show cpi_inflation_annual across 48 sampled countries over 1996–2022.
The shapes above are stylised — none of the lines are real data.
Placeholder for freiburg_strong_state_independent_central_bank_synergy_panel. Published chart will be generated from engine/runs/freiburg_strong_state_independent_central_bank_synergy_panel/chart_data.json.

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-06-29T17:53:18Z
Run timestamp predates this path's first git-add commit (rebase, rename, or pre-git local run). Spec hash is still the path's first-add commit — not repository HEAD — but ordering is not a clean pre-registration proof.

Across countries 1996-2022, the joint condition of high rule-of-law (WGI RL) and high de-jure central-bank independence (proxied by Fraser-EFW area-3 sound-money sub-component plus institutional rules) predicts simultaneously lower mean inflation AND lower output volatility than either single condition alone. The Freiburg "strong state plus independent central bank" doctrine is that the two pillars are interactive: a rule-bound state needs a rule-bound monetary authority, and the combined regime is more than the sum of its parts. The test is a panel interaction term on the WGI-RL x EFW-area-3 product against twin outcomes (CPI inflation, GDP-growth volatility).

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

SUPPORTED if both (a) the interaction-term coefficient (RL × sound-money) is negative and significant at p<0.05 on inflation, AND (b) the same interaction-term coefficient is negative and significant at p<0.10 on output volatility (twin- outcome dual condition). PARTIAL if the interaction is significant on inflation but not on volatility. REFUTED if the interaction is wrong-signed or insignificant on inflation. INFORMATIVE: main-effect-only specification's R² compared to interaction specification — if the interaction adds <2pp to R² on either outcome, the synergy claim is empirically marginal even if statistically significant.

formal test & threshold
test:      panel_fe_rl_x_sound_money_dual_outcome
threshold: PRIMARY: beta(RL × area3) < 0 at p<0.05 on inflation AND beta(RL × area3) < 0 at p<0.10 on growth volatility. INFORMATIVE: R² gain from interaction term >= 0.02 on each outcome.

Method

Template
panel_fe
Fixed effects
country, year
Clustering
country
Sample
48 countries · 1996 – 2022
Evidence type
associational

Two-way fixed-effects panel with the interaction term as the object of interest. Standard errors clustered by country. Identification from within-country variation in either pillar. Robustness: drop the interaction and run main effects only; Freiburg synergy claim requires interaction-term significance above and beyond main effects.

Data

VariableSourceTransform
cpi_inflation_annual
outcome
imf:PCPIPCHtier 2
level
gdp_growth_volatility_5yr
outcome
world_bank_wdi:NY.GDP.MKTP.KD.ZGtier 2
rolling_5yr_stdev
wgi_rule_of_law
treatment
wgi:RL.ESTtier 4
level
efw_sound_money_area3
treatment
fraser_efw:area_3_sound_moneytier 4
level
rl_x_sound_money_interaction
treatment
constructed:wgi:RL.EST × fraser_efw:area_3_sound_moneytier 5
product_term
initial_log_gdp_pc
control
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log_level_at_block_start
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level
gen_govt_debt_pct_gdp
control
imf:GGXWDG_NGDPtier 2
level
vdem_liberal_democracy
control
vdem:v2x_libdemtier 4
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — freiburg_strong_state_independent_central_bank_synergy_panel

Verdict: PARTIAL — coef=+0.8817, p=0.697 (above α=0.05); direction inconclusive

Pre-registration

  • Claim: Across countries 1996-2022, the joint condition of high rule-of-law (WGI RL) and high de-jure central-bank independence (proxied by Fraser-EFW area-3 sound-money sub-component plus institutional rules) predicts simultaneously lower mean inflation AND lower output volatility than either single condition alone. The Freiburg "strong state plus independent central bank" doctrine is that the two pillars are interactive: a rule-bound state needs a rule-bound monetary authority, and the combined regime is more than the sum of its parts. The test is a panel interaction term on the WGI-RL x EFW-area-3 product against twin outcomes (CPI inflation, GDP-growth volatility).
  • Falsification rule: SUPPORTED if both (a) the interaction-term coefficient (RL × sound-money) is negative and significant at p<0.05 on inflation, AND (b) the same interaction-term coefficient is negative and significant at p<0.10 on output volatility (twin- outcome dual condition). PARTIAL if the interaction is significant on inflation but not on volatility. REFUTED if the interaction is wrong-signed or insignificant on inflation. INFORMATIVE: main-effect-only specification's R² compared to interaction specification — if the interaction adds <2pp to R² on either outcome, the synergy claim is empirically marginal even if statistically significant.
  • Falsification test: panel_fe_rl_x_sound_money_dual_outcome

Estimate

  • Method: linearmodels.PanelOLS
  • Coefficient (treatment): +0.8817
  • Std error: 2.261
  • p-value: 0.697
  • Observations: 962, countries: 41
  • Within R²: 0.00685
  • Fixed effects: entity=True, time=True
  • Clustering: country

Variables resolved

  • imf:PCPIPCH → cpi_inflation_annual (outcome, publisher=imf, n=10789)
  • world_bank_wdi:NY.GDP.MKTP.KD.ZG → gdp_growth_volatility_5yr (outcome, publisher=world_bank_wdi, n=13897)
  • wgi:RL.EST → wgi_rule_of_law (treatment, publisher=wgi, n=5296)
  • fraser_efw:area_3_sound_money → efw_sound_money_area3 (treatment, publisher=fraser_efw, n=4625)
  • constructed: wgi:RL.EST × fraser_efw:area_3_sound_money → rl_x_sound_money_interaction (treatment, publisher=constructed, n=1296)
  • world_bank_wdi:NY.GDP.PCAP.KD → initial_log_gdp_pc (controls, publisher=world_bank_wdi, n=12104)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, publisher=world_bank_wdi, n=10714)
  • imf:GGXWDG_NGDP → gen_govt_debt_pct_gdp (controls, publisher=imf, n=8113)

Variables missing data

  • vdem:v2x_libdem (controls, name=vdem_liberal_democracy) — vintage not on disk

Generated by scripts/run_panel_fe.py at 2026-06-29T17:53:18+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

The "strong state plus independent central bank" formulation is Eucken's; Müller-Armack's "social market economy" carries the political-economy framing. The interaction test is the cleanest available expression of the synergy claim against published WGI + EFW data. v2 could substitute Bade-Parkin or Cukierman CBI indices once registered, which would tighten the institutional- CBI proxy.

Authored framework. Read the transparency note.