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Topic: Correlates of Prosperity
Message: Posted by: Woland (Jun 6, 2011 09:40AM)
According to [url=http://www-wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2011/05/16/000158349_20110516090121/Rendered/PDF/WPS5660.pdf]a study published by the World Bank:[/url]

[quote]Reviewing the economic performance—good and bad—of more than 100 countries over the past 30 years, this paper finds new empirical evidence supporting the idea that economic freedom and civil and political liberties are the root causes of why some countries achieve and sustain better economic outcomes. For instance, a one unit change in the initial level of economic freedom between two countries (on a scale of 1 to 10) is associated with an almost 1 percentage point differential in their average long-run economic growth rates. In the case of civil and political liberties, the long-term effect is also positive and significant with a differential of 0.3 percentage point. In addition to the initial conditions, the expansion of freedom conditions over time (economic, civil, and political) also positively influences long-run economic growth. In contrast, no evidence was found that the initial level of entitlement rights or their change over time had any significant effects on long-term per capita income, except for a negative effect in some specifications of the model. These results tend to support earlier findings that beyond core functions of government responsibility—including the protection of liberty itself—the expansion of the state to provide for various entitlements, including so-called economic, social, and cultural rights, may not make people richer in the long run and may even make them poorer.[/quote]

Woland
Message: Posted by: Magnus Eisengrim (Jun 6, 2011 09:56AM)
Interesting that the paper is based on his book, published by the Cato Institute--a libertarian think tank.

Thanks for the link. Hopefully, I 'll get a chance to peruse the paper in the next couple of days.

John
Message: Posted by: critter (Jun 6, 2011 10:25AM)
This thing contradicts itself all over the place. Freedom is good but freedom is bad?
And then there are some things that just aren't worth selling. Like civil rights, and the right to vote. Both of which were cited as the enemies of profit in this article.
As money guru Suze Orman says:
"People first, then money, then things."
Message: Posted by: Woland (Jun 6, 2011 10:56AM)
I think you have it backwards, critter. Civil liberties, political liberties, and economic freedom all contribute to prosperity.
Message: Posted by: critter (Jun 6, 2011 11:12AM)
Yeah, but I saw another quote in the article that contradicted that. I'm trying to find it again. Maybe I hallucinated it. I was sure it was there... Weird.

I'll read it again at the end of the week and hopefully my brain will be working again by then.
Message: Posted by: balducci (Jun 6, 2011 11:50AM)
I tend to agree with the premise in the paper, at least to the extent that I don't see how freedoms could hurt.

But a sample size of 13 seems puny for this sort of study. And the data he used ended in 2007, i.e., pre-crisis.

I wonder what the 13 countries used in the study were? I suppose it is documented somewhere, but the article itself only appears to mention a few by name. Greece is one of them, and it appears that Greece is considered to be one of the success stories. I bet that sure changed since 2007.

[quote]
On Jun 6, 2011 10:40am, Woland wrote:

According to [url=http://www-wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2011/05/16/000158349_20110516090121/Rendered/PDF/WPS5660.pdf]a study published by the World Bank:[/url]

[quote]These results tend to support earlier findings that beyond core functions of government responsibility—including the protection of liberty itself—the expansion of the state to provide for various entitlements, including so-called economic, social, and cultural rights, may not make people richer in the long run and may even make them poorer.[/quote]
[/quote]

Operative words in the above being "MAY not". Or, maybe they do. Who knows?

But even if those things don't directly contribute to people's wealth, so what? They still may have other demonstrable benefits to society.

I bet if we threw the "right to bear arms" in there, the evidence would show that it has no demonstrable effect on people's wealth in different countries either. So does that mean you want to get rid of it?
Message: Posted by: Woland (Jun 6, 2011 02:32PM)
No single article can have all the answers, and no single argument should substitute for a thoroughgoing examination . . . the importance here is that there is at least some sort of empirically based evidence to suggest that planned economies are not in fact the most efficient. That might not seem like rocket science, but it is far from universally accepted.
Message: Posted by: balducci (Jun 6, 2011 02:45PM)
That's fine, but it still misses the point. The "so-called economic, social, and cultural rights" Chauffour is attacking still may have other demonstrable benefits to society. It's not all about an extra dollar in some manager's / banker's pocket.