Preliminary and Unfinished Draft – Please Do Not Quote

What factors determine the environmental and quality of life conditions that exist in different regions of the world? What factors can explain how these conditions evolve through time? This paper empirically examines the answers to these questions, focusing on the link between economic freedom, its impact on institutional formation, and environmental quality. Compiling a new panel data set that encompasses years of environmental and public health outcomes for 130 countries, we utilize fixed-effects methods to understand the channels in which economic freedom can lead to a cleaner and healthier environment. Our results show that economic freedom manifests itself in better contracting institutions, which then correlate with positive health and environmental outcomes. We also find that lack of economic freedom correlates with poorer political institutions in general, leading to worse environmental and public health outcomes. These results are robust to different control sets and specifications. JEL Classification: N5, P5, Q2