Tim Worstall summarizes a recent World Bank report that seems to have reached quite sensible conclusions:
Given the level of economic debate currently in the UK the results might surprise. For they support an economic and civil liberalism entirely unlike anything that any political party currently puts forward. This first result is that:
For instance, a one unit change in the initial level of economic freedom between two countries (on a scale of one to 10) is associated with an almost one percentage point differential in their average long-run economic growth rates.
This is unlikely to please those we think of as being on the political left: what, you mean people should just be allowed to get on with things without the direction of a beneficent state? But there’s not that much support for the sort of One Nation Tory paternalism of the other lot either:
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.
Yes, people really should be left alone, to shag and to smoke and to live their lives as they please. And finally, it’s going to absolutely appal all of those who insist that it’s the positive freedoms that really produce 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.
Income redistribution, high (or low) unemployment pay, child care subsidies, they just don’t make any positive difference to growth but might have negative ones.
In other words, the less your government tries to do outside the basic duties of protecting the citizens from external threats and domestic crime, and providing an honest and transparent set of laws and a stable legal framework, the better off your country will be both economically and socially. Kinda like that minarchistic “night watchman state”.
