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The key ingredients of economic freedom are personal choice, voluntary exchange, freedom to compete, and the protection of persons and property. Economic freedom creates an environment in which personal ingenuity can flourish.
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.
Economic Freedom of the World provides the most comprehensive index of economic freedom available. It uses reproducible measures appropriate for peer-reviewed research. Approximately 200 scholarly articles have employed the index.
