| − | {{Cquote|Most modern economies operate to some degree dirigistically. Government regulation and control are a significant part of most economies throughout the world today. But a significant amount of evidence has been amassed that demonstrates that economic freedom rather than government control is positively correlated with economic growth (Gwartney and Lawson 2006). In this work motivated by Milton Friedman’s Capitalism and Freedom (1962) and Free to Choose (1980), economic freedom in a country is determined on the basis of an analysis of the security of private property and the freedom of contract, the tax burden, the inflation rate, the extent of regulation, and the prevailing policies toward foreign trade. When property rights are weak, taxes are high, inflation is ramped, regulation is extensive, and protectionism rather than free trade defines the policy space, the economic freedom score will be low... | + | {{Cquote|Most modern economies operate to some degree dirigistically. Government regulation and control are a significant part of most economies throughout the world today. But a significant amount of evidence has been amassed that demonstrates that economic freedom rather than government control is positively correlated with economic growth (Gwartney and Lawson 2006). In this work motivated by [[Milton Friedman]]’s [[Capitalism]] and Freedom (1962) and Free to Choose (1980), economic freedom in a country is determined on the basis of an analysis of the security of private property and the freedom of contract, the tax burden, the inflation rate, the extent of regulation, and the prevailing policies toward foreign trade. When property rights are weak, taxes are high, inflation is ramped, regulation is extensive, and protectionism rather than free trade defines the policy space, the economic freedom score will be low... |
| | A key issue to remember in debating the role of government in an economic system is to distinguish between scale and scope. Much of the debate over “big government” focuses on the issue of scale—government spending as a percentage of gross domestic product. But in debating the impact of dirigisme, it may be more appropriate to focus on the issue of scope—the extent of activities the public sector attempts to control in economic decision making. A “[[big government]]” that permits a wide range of economic freedom would be less cumbersome on economic life than a “[[small government]]” that tries to control prices in every sector. The lack of economic freedom, not the size of government, causes the decline in economic growth in nations.<ref>[https://www.encyclopedia.com/social-sciences-and-law/sociology-and-social-reform/sociology-general-terms-and-concepts/dirigisme Dirigisme], Encyclopedia.com</ref>}} | | A key issue to remember in debating the role of government in an economic system is to distinguish between scale and scope. Much of the debate over “big government” focuses on the issue of scale—government spending as a percentage of gross domestic product. But in debating the impact of dirigisme, it may be more appropriate to focus on the issue of scope—the extent of activities the public sector attempts to control in economic decision making. A “[[big government]]” that permits a wide range of economic freedom would be less cumbersome on economic life than a “[[small government]]” that tries to control prices in every sector. The lack of economic freedom, not the size of government, causes the decline in economic growth in nations.<ref>[https://www.encyclopedia.com/social-sciences-and-law/sociology-and-social-reform/sociology-general-terms-and-concepts/dirigisme Dirigisme], Encyclopedia.com</ref>}} |