Economic freedom is playing an important
role in economic development and human progress. It can influence all aspects of
our life includes happiness, gender equity and even economic growth.
Economic freedom is based on the concept of
self-ownership which means individuals have a right to choose how they spend
their time and which lifestyle they want to live. The EFW index is to measure
an institution or a country’s level of economic freedom. It contains five major
of government focus on how government expenditures and tax rates affect
System and Property Rights targets on the importance of the legal system as a
determinant of the economic freedom.
money means money with stable purchasing power across time can promoting
to trade internationally focus on trade with people in other countries.
measures how regulations restrict exchange in markets.
and Anthony (2017) compared the data they collected over the past years, they
concluded that economic freedom is associated with economic development. The
greater the economic freedom, the better the economic development.
There is a positive correlation between
economic freedom and happiness. Economic freedom can be one of the most
essential route to happiness. As we can see from the data, people in countries
with greater economic freedom tend to be happier about their lives (James,
Robert & Joshua, 2017). If people have rights to choose which school to
study, they will not only become more motivated to study but also found the
pleasure of learning. If people have rights to choose which country to live, they
are more likely to stay in a good mood and use a positive attitude towards
other things or other people.
Economic freedom is also associated to
gender equity. It is evident that men and women tend to fare equally in
countries with greater economic freedom (James, Robert & Joshua, 2017). If
women have rights to be educated, they can be equipped with some health
knowledge in order to protect themselves. Moreover, once women are educated,
they are able to dealing with various problems in their daily life. Being
educated will also let them have an opportunity to find a job they are interested
in. Furthermore, economic freedom helps women participate in society as an
independent individual. Statistics show that the legal recognition of married
women’s right to open a bank account, to enter into contracts without their
husband’s permission led to increased participation of women in the labour
market. In Namibia, it grows from 48% to 57% and from 46% to 63% in Peru over a
ten-year period (Christian, 2015).
Economic freedom also contributes to promote
economic growth. The least free countries have only 1.66% growth rate of GDP
per capita from 1990-2015. Meanwhile, most free countries have 3.35% growth
rate of GDP per capita. It is more than 2 times than least free countries. From
the data, we can observe a positive correlation between economic freedom and
economic growth (James, Robert & Joshua, 2017). For example, People who
live in the countries with greater economic freedom have opportunities to start
big companies or even international corporations that provide millions of job
opportunities. Therefore, it can ease the unemployment in order to promote the
economy. In addition, people who live in the countries with greater economic
freedom can also invest in developing new technologies and new modes of production.
In this case, with advances in technology, productivity can be improved.
To sum up, economic
freedom can promote economic development in many aspects. The influence of
economic freedom cannot be underestimated.
Christian Gonzales, S.
J.-C. (2015). Fair Play: More Equal Laws Boost Female Labor Force
James Gwartney, R. L. (2017). Economic Freedom of the World 2017
Annual Report. Fraser Institute.