James d. Gwartney

Video:
Economic Freedom and Growth

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Exhibit 15: Economic Freedom and Extreme and Moderate
Poverty Rates
31.71%
51.74%
28.82%
14.05%
5.88%
1.48%
4.31%
14.25%
0
10
20
30
40
60
50
extreme moderate
extreme moderate
extreme moderate
extreme moderate
Least Free
Third
Second
Most Free
Economic Freedom Quartile
Poverty rate
(% of population)
Extreme and moderate poverty are lower in countries with more economic freedom.
Note: The extreme poverty rate is the percentage of a country's population that lives on $1.90 per day; the moderate
poverty rate is the percentage that lives on $3.20 per day, in 2011 constant PPP-adjusted dollars.
Sources: Average Economic Freedom Panel Score, 1995–2016; World Bank, 2017, World Development Indicators; for
details, see Connors, 2011.
Of course, money is not the only way to measure increasing well-being in the world.
Economically free countries are also the place to live if you care about other outcomes. Infant
mortality (shown in Exhibit 16) serves as a good indicator of the quality of medical care.

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Exhibit 16: Economic Freedom and Infant Mortality Rate
42.25
23.35
16.01
6.28
0
10
20
30
40
50
Least Free
Third
Second
Most Free
Economic Freedom Quartile
Mortality rate, infants
(per 1,000 live births, 2016)
The infant mortality rate is almost seven times higher in nations in the lowest quartile of economic freedom compared to
nations in the highest quartile.
Sources: Average Economic Freedom Panel Score, 1995–2016; World Bank, 2017, World Development Indicators.
Finally, there is happiness itself. Economists are uncomfortable with simply asking
people: “How happy are you?”, but Exhibit 17 reveals that there is clearly a link between their
answers to such a question and the degree of economic freedom they have.

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