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| EST. READ TIME 1 MIN.Economic freedom promotes growth while foreign aid fails developing countries
The index published in Economic Freedom of the World measures the degree to which the policies and institutions of countries are supportive of economic freedom. The cornerstones of freedom are personal choice, voluntary exchange, freedom to compete, and security of privately owned property. Thirty-eight data points are used to construct a summary index and to measure the degree of economic freedom in five areas: (1) size of government; (2) legal structure and security of property rights; (3) access to sound money; (4) freedom to trade internationally; and (5) regulation of credit, labour, and business.
A special chapter by William Easterly of New York University compares the impact of economic freedom with that of foreign aid, the old nostrum for creating economic well-being in the developing world. He shows that foreign aid is ineffective, but he has extremely good news for poorer countries. They can lift themselves from poverty on their own, without depending on uncertain and often politically motivated outside "help."
Dr. Easterly shows that economic freedom is a powerful tonic for growth. Quite literally, poorer nations only need liberate their people from policies that limit economic freedom. The unleashed dynamism and ingenuity will build prosperity and reduce poverty in a way that foreign aid has repeatedly failed to achieve.
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James Gwartney
Professor of Economics, Florida State UniversityJames D. Gwartney was a Professor of Economics and the Gus A. Stavros Eminent Scholar at Florida State University. He wasthe coauthor of Economics: Private and Public Choice (Cengage/South-Western Press, 2021), a widely used principles of economics text that is now in its 17th edition. He was also coauthor of an economics primer, Common Sense Economics: What Everyone Should Know about Wealth and Prosperity (St. Martin’s Press, 2016). His publications appeared in both professional journals and popular media such as the Wall Street Journal and the New York Times. He served as Chief Economist of the Joint Economic Committee of the US Congress during 1999–2000. In 2004, he was the recipient of the Adam Smith Award of the Association of Private Enterprise Education for his contribution to the advancement of free-market ideals. He was a past President of the Southern Economic Association and the Association for Private Enterprise Education. His Ph.D. in economics was from the University of Washington.… Read more Read Less… -
Robert A. Lawson
Clinical Professor in Economics and Director, Bridwell Institute for Economic Freedom, Southern Methodist UniversityRobert A. Lawson is Clinical Professor in Economics, Jerome M. Fullinwider Centennial Chair in Economic Freedom, and Director of theBridwell Institute for Economic Freedom in the Cox School of Business at Southern Methodist University. He earned his B.S. in economics from the Honors Tutorial College at Ohio University and his M.S. and Ph.D. in economics from Florida State University. A Senior Fellow at the Fraser Institute, he has numerous professional publications in journals such as Public Choice, Cato Journal, Journal of Labor Research, Journal of Institutional and Theoretical Economics, and the European Journal of Political Economy. Prof. Lawson has served as President of the Association of Private Enterprise Education and is a member of the Mont Pelerin Society.… Read more Read Less…
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