31 January 2006

Economic Freedom x Democracy = More Income

Aside from focusing upon what works and doesn't work in eliminating poverty, William Easterly's "Planners vs Searchers in Foreign Aid" (available as a 273KB PDF document) also has a neat graphic showing a positive correlation between per capita income for various nations and their combined economic freedom and democratic institution rankings:

Perhaps unsurprisingly, the wealthiest nations in the per capita income measure are those that promote the greatest economic freedom for individuals combined with strong democratic institutions. The nations at the other end of the scale are, to say the least, far from meeting their potential.