Why is economic freedom an important factor to consider when analyzing a country's economic development, performance, and potential?
Answer: Economic freedom helps explain a country's development, performance, and potential. Higher-rated countries generally outperform laggards on a variety of measures. Countries with high economic freedom have higher rates of growth and productivity. Income is higher in countries with higher economic freedom; it more than doubles the worldwide average and is 7 times higher than in mostly unfree and repressed economies. Positive relationships exist between economic freedom inflation, and employment. Economic freedom pays social dividends. Life expectancy, literacy, political openness, and environmental sustainability show positive relationships with economic freedom. Collectively, data indicate a positive relationship between economic freedom and various measures of economic performance and quality of life. The data support the argument that liberating resources from government control improves financial performance, economic stability, and standards of living.