If we change the question we ask regarding poverty, the picture of the problem becomes clearer. We should examine the conditions that allow prosperity to occur rather than asking how to spend money to eliminate poverty.
The correlation between prosperity in nations and the conditions of economic freedom in those same nations is absolutely clear. The Fraser Institute in Vancouver, Canada, in partnership with a network of think tanks around the world, publishes an Economic Freedom of the World study annually. The study uses measures of economic freedom, developed by a distinguished team of economists that includes the state of law, courts, and economic and regulatory management, to rank nations by their level of economic freedom.
The data show clearly that the less economically free a nation is, the more likely it will be poor. The more likely a nation is economically free, the more likely it will be prosperous.
In particular, last year's Economic Freedom of the World study showed that the highest quintile of nations that are economically free have an average per capita GDP of $26,106. The nations in the lowest quintile of economic freedom have an average per capita GDP of $2,828.
The Heritage Foundation publishes a similar Index of Economic Freedom each year that reports similar results. The Heritage report displays a graph showing geographic distribution of various regions according to economic freedom and income. Africa is by far disproportionately represented on the side of the graph that is economically not free and poor.
As President Bush prepares to discuss global poverty in general, and in Africa in particular, with other world leaders, he is under great political pressure to agree to address poverty with aid money rather than pressure for policy reforms. As I noted earlier, the aid issue lends itself readily to politicization.
The Europeans are forever looking for angles to blame America for the world's ills. Recently, pastors from some of the largest black churches in the United States wrote to the president urging large increases in US aid to Africa.
As we celebrate the 229th birthday of the United States, we should remember two things. First, we are the most generous nation in the world. Americans delivered $80 billion to the developing world in aid and assistance last year. Of this $80 billion, over $60 billion came from private rather than government sources. Second, Americans have the capability to provide this largesse because we are free and freedom is what produces prosperity everywhere.
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