Abstract:
Adam Smith’s well-known book, An Inquiry into the Nature and Causes of the Wealth of Nations, shows that free markets, the protection of private property rights and a minimal government interference in the economy lead to prosperity. The development economics literature has expansive evidence that economic freedom and sound legal, financial and political institutions boost economic growth. The basic ideas of Adam Smith has let economists to take an interest in economic and political institutions. Recent empirical work has analyzed country-level data on the gross domestic product (GDP). Another line of empirical research focuses on the link between economic freedom and economic growth. This study investigates the association between the economic freedom, economic growth, and prosperity.
