Why do some countries feast, while others live with famine?
There's a good article in the Economist explaining exactly why, Economic freedom, argues the report, does much to foster the investment poor countries urgently need if they are to grow. James Gwartney and Robert Lawson, its authors, have found that the freest 20% of countries invest around $11,000 per worker, more than 12 times the figure for the least free 20%. The effects of economic freedom on coveted foreign direct investment (FDI) are even stronger. The freest fifth of countries attracted over $3,000 of FDI per worker, against $68 for the least free fifth. Moreover, freer countries make better use of what they have: the authors estimate that investment is 70% more productive in the most free countries than in the least free. This translates into faster GDP growth (see chart). After adjustment for differences in initial income, climate, the proportion of people near coastlines and human capital, countries with a freedom score below five saw growth of less than 0.4% a year, on ...