The Relationship between Economic Freedom and Prosperity

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Countries that allow consumers to control resources have been prosperous
economically. This is because of efficient allocation of resources, innovation and value
creation. This constitutes to the phenomenon of economic freedom which stresses the right of
every human to control and direct their resources. The modern world successful and
tremendous growing economies such as Singapore are not geographically large or countries
endowed with minerals and natural resources. However, nations such as Singapore and New
Zealand have achieved tremendous growth by enhancing their economic dynamism.
Economic dynamism can be successfully handled by the economy by governments adopting
economic policies that empower the business freedom of all the individuals1. Economic
policies will act as incentive to the entrepreneurs thus translating to an economy that is open
for economic activity eventually boosting the amount of cash flow in the economy.
Translating to increase in per capita income. In comparison to the repressed economies it has
been noted that countries that implemented economic freedom policies have registered low
poverty levels. This has been attributed to the amount of market opportunities on the disposal
in these free market countries.
Decades ago the developed western countries believed on the perspective that they
could hasten the growth of developing countries by extending financial aid to this countries.
They mainly looked at the government has the sole key to economic prosperity. However, to
their dismay most of this financial aid were misappropriated and invested in unproductive,
dormant projects. Most of the developed countries have cut the pipeline of funds flowing to
developing economies in form of financial aid by encouraging their governments to adopt
and implement economic freedom polices2. However, to sustain economic freedom countries
1 Heritage foundation. Societies Thrive as Economic Freedom Grows.2018 index of economic freedom (2018).
https://www.heritage.org/index/book/chapter-2
2 Bruce Scott. How Do Economies Grow? Harvard business review, (2018). https://hbr.org/1997/05/how-do-
economies-grow