The Atlantic Council’s Freedom and Prosperity Center has awarded Ignacio P. Campomanes, resident fellow of the NCID at the University of Navarra, a Freedom and Prosperity Academic Grant to finance a research project titled “Paths to Prosperity: Interactions between Rule of Law, Economic and Political Freedom”. These grants aim to promote research that explores the concepts of freedom and democracy, and the mechanisms through which they affect overall prosperity.
A simple look at the world today reveals a clear picture: the most prosperous countries are almost without exception established democracies where freedom and fundamental rights are preserved and defended. Anyhow, historical and current examples of democracies that failed to deliver prosperity for their citizens show that freedom and democracy are not sufficient conditions. Furthermore, the spectacular economic performance of China and other non-democratic and countries in the last few decades could lead some to the conclusion that freedom is not even necessary to generate increasing prosperity.
This research project aims to shed light on the freedom-prosperity debate by developing a new theoretical framework that unbundles the different dimensions of freedom, analyzes their interactions and linkages, and the mechanisms through which they affect development and prosperity. In line with the newly launched FPC Index, we can think of freedom as having three dimensions: Legal, Economic and Political. The first phase of the project, from July to December 2022, will review the delineation of these components of freedom proposed by legal scholars, political scientists and economists, as well as the existing empirical counterparts that have tried to measure them across countries and time. Armed with a clear understanding of the subcomponents of freedom, a second phase of the project starting in 2023 will develop a novel theoretical framework that explicitly links the different dimensions of freedom to the mechanisms that drive economic growth and other measures of prosperity. Ultimately, the theoretical framework will be confronted with the data, in order to rationalize the paths to development (or lack of it) of different countries, and to draw policy recommendations for today’s least developed nations in their quest for prosperity.