Economic Freedom and Development: Why the Statistical Correlation?
According to Prof. Jacques Garello, there are five steps that are needed in order to obtain economic freedom: Size of government, legal structure and security of property rights, access to sound money, freedom to trade internationally, and regulations. He analyzes the strong correlation between economic freedom and economic growth, as well as education and health; he also mentions the relationship between financial freedom, per-capita income, increase amount of private investments and the increase of knowledge that are caused by an open economy. Prof. Garello emphasizes the importance of human capital by demonstrating that countries with limited natural resources, such as Japan and Korea, have a great amount of wealth due to the amount of human capital; after all, the ideal economy is the one in which the most amount of wealth is created with the least amount of resources.
