The Relationship between Economic Freedom and Prosperity

This article discusses the relationship between economic freedom and prosperity. It highlights how countries that allow consumers to control resources have been prosperous economically. The article also emphasizes the importance of economic policies that empower business freedom and the private sector. Additionally, it discusses the social benefits of economic growth such as an increase in literacy levels.

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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

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in subject should encourage their citizens to be more enterprising and work on boosting their
financial inclusiveness3. Actually a market controlled by the private sector is able to avail
more resources in the market. When the Pakistan economy opened up for the private sector
Pakistan noted a tremendous growth in its technological and communication sector due to the
increase in phone connections at affordable prices4. Actually this depicts the results of
economic freedom driven market. Moreover, apart from the materialistic and monetary
benefits of economic growth it also leads to other social benefits such as increase in literacy
levels.
3 World Bank. Financial Inclusion: Financial inclusion is a key enabler to reducing poverty and boosting
prosperity. Washington D.C.(2018). https://www.worldbank.org/en/topic/financialinclusion/overview
4 Muhammad Ayub Mehar. Common Sense Economics, What Everyone Should Know about Economic
Prosperity (Pakistani Edition). Munich Personal RePEc Archive, 2018.
https://mpra.ub.uni-muenchen.de/44737/1/MPRA_paper_44737.pdf

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Bibliography
Bruce Scott. How Do Economies Grow? Harvard Business Review. (2018).
https://hbr.org/1997/05/how-do-economies-grow
Heritage Foundation. Societies Thrive as Economic Freedom Grows.2018 Index Of
Economic Freedom (2018). https://www.heritage.org/index/book/chapter-2
Muhammad Ayub Mehar. Common Sense Economics, What Everyone Should Know about
Economic Prosperity (Pakistani Edition). Munich Personal RePEc Archive, 2018.
https://mpra.ub.uni-muenchen.de/44737/1/MPRA_paper_44737.pdf
World Bank. Financial Inclusion: Financial inclusion is a key enabler to reducing poverty
and boosting prosperity. Washington D.C. (2018).
https://www.worldbank.org/en/topic/financialinclusion/overview