The Atlantic Council’s Freedom and Prosperity Center hosted their first annual Freedom and Prosperity Research Conference on Thursday, February 2, 2023.
Our organization’s experts and featured scholars from the Bucharest University of Economic Studies, Columbia University in New York, the London School of Economics, Mackenzie Presbyterian University of Brazil, University of Navarra of Spain, Indian School of Public Policy, and Texas Tech University presented their research on the importance of freedom in promoting prosperity in developing countries.
The event also included opening remarks from Damon Wilson, CEO of National Endowment for Democracy, as well as a conversation between Fred Kempe, CEO of the Atlantic Council, and Michael Fisch, Founder & CEO of American Securities and Chairman of the Advisory Council of the Freedom of Prosperity Center. Current and former officials from Egypt, Mexico, and Tunisia also spoke.
Dan Negrea, Senior Director of the Freedom and Prosperity Center, outlined the work of the Center, which aims to improve the lives of the poor and marginalized in developing countries. Negrea expressed gratitude for the contributions of Michael Fisch, Fred Kempe, and Damon Wilson in envisioning and founding the center, and noted the Center’s analytical and advocacy partners, the Acton Institute and Atlas Network.
Frederick Kempe, president and chief executive officer of the Atlantic Council, and Michael Fisch, founder and chief executive officer of American Securities and chairman of the Freedom and Prosperity Center’s Advisory Council, discussed the biggest risks to the global economy and thus to poor and marginalized people worldwide.
Damon Wilson, president and chief executive officer of the National Endowment for Democracy, spoke about building the case that democracy is the best pathway for people, especially poor people, and global prosperity.
Khémaies Jhinaoui discussed the ongoing struggle for freedom and prosperity in the Middle East and North Africa. Lack of realism and inexperience on the part of ruling regimes hindered progress in the region following the Arab Spring. Despite disappointing outcomes, Jhinaoui explained, there are still reasons for hope, as the aspiration to change continues to drive large segments of the population in the region.
Markus Jaeger discussed the various factors that play a role in the many pathways towards prosperity. Economic development is a complex, multi-causal phenomenon, he explained, and it is useful to consider how different elements, including a nation’s policies and institutions, interact to produce sustained economic growth. Depending on the situation, Jaeger argued, various reforms can nudge nations toward certain paths.
Julio Amador Diaz Lopez discussed whether the Western or authoritarian worldview is better equipped to harness the advent of new technology. While there is no clear answer, the Western system—characterized by a willingness to take risks, a diverse population, and less restrictive politics—is better suited for promoting innovation than the authoritarian model, which is more restrictive and risk-averse. He concludes that protecting the rule of law, free markets, and diversity is key to harnessing new technologies.
Clara Volintiru and Camelia Crisan argued that the road to prosperity in Eastern Europe requires clear engagement from allies in the European Union and the transatlantic community. They maintained the region can grow economically by adopting a “flexibility plus conditionality” model in which countries open themselves to foreign investment but dictate where these investments are directed. In addition to opening to foreign investment, Volintiru and Crisan asserted, Eastern European countries should seek support from multilateral institutions to fight corruption and maintain solidarity in crises such as the COVID-19 pandemic and the Russian invasion of Ukraine.
Ignacio Campomanes delved into liberal democracies and the three main ingredients that make up these societies: the rule of law, economic freedom, and democracy. In his research, he aimed to better define these attributes in order to understand the relationship between freedom and prosperity. He looked at the role of democracy in driving growth and the evolution of popular support for the democratic model.
Panelists discussed various factors that determine a country’s prosperity. These included the role of innovation, the debate between free markets versus authoritarian economies, and the role of political freedoms. Panelists pointed to real world examples, such as the transition from communism to democracy in Eastern Europe, and China’s policies of maintaining economic freedom while remaining politically unfree.
Mohamed M. Farid examined Egypt’s development over the last fifteen years and the limitations of heavy-handed government intervention and poorly thought-out public spending. The author argued that in order to go forward, Egypt must reduce the role of the state in the economy, implement free-market reforms, and increase public investments in human capital.
Parth Shah used the Freedom and Prosperity Indexes to identify policy gaps in India and the pathway towards more economic, political, and legal freedoms.
Vladimir Fernandes Maciel examined the relationship between freedom and prosperity by using the Freedom and Prosperity Indexes and a neo-institutionalist approach. He walked through the observations over time and groups (panel data analysis) and Granger causality tests that examine the relationship in different regions of the world. The results showed that freedom is positively related to prosperity and that there is a bicausal relationship between the two, with both freedom and prosperity affecting each other.
Vanessa Rubio Márquez investigated the Freedom and Prosperity Indexes’ applications in real-life policy debates and policymaking. The author argued that the indexes are useful for identifying the factors that make a country free and prosperous, as well as for providing benchmarks for comparison with other countries. Drawing on her experience and knowledge of Mexican politics, she stressed the importance of understanding and assessing the relevant context and trends in order to effectively utilize the indexes. Freedom and prosperity are fragile ideals that depend on many factors that must be protected and consistently adjusted, she said, adding that particular attention must be paid to countries where warning signs of decline are present.
Benjamin Powell discussed how economic freedom not only correlates with prosperity but is an important cause of prosperity. He discussed his application of the Mahalanobis Distance Matching method to the Atlantic Council’s Economic Freedom sub-index in order to analyze the causal statistical relationships between improvements in economic freedom and subsequent prosperity. He found that meaningful increases in economic freedom led to large increases in gross domestic product per capita over a five-year time horizon, supporting Adam Smith’s assertion that increased economic freedom is an essential ingredient for greater prosperity worldwide.
Panelists discussed a variety of topics related to prosperity in their respective countries. Topics included freedom of expression in Mexico, foreign direct investments in India, and the importance of strong human capital and stability in Egypt. Additionally, panelists elaborated further on broader topics such as the bi-causal relationship between freedom and prosperity and the growth trajectory of China under its current economic model.
Dan Negreathanked the presenters and announced their contributions to the Center’s upcoming book of essays, The Prosperity Equation.
Photos
Speakers
Presenters
H.E. Khemaies Jhinaoui President, Tunisian Council on Foreign Relations; Former Minister of Foreign Affairs, Tunisia
Clara Volintiru Professor, Bucharest University of Economic Studies, Romania; Director, Bucharest Office, German Marshall Fund and Black Sea Trust
Camelia Crisan Assistant Professor, National School of Political Science and Public Administration (SNSPA); Managing Director, Project Romania 2030
Markus Jaeger Adjunct Associate Professor, Columbia University; Fellow, German Council on Foreign Relations Center for International Development
Julio Amador Diaz Lopez Lecturer, Imperial College London
Ignacio Campomanes Resident Fellow, Center for International Development, Navarra University, Spain
Mohamed Farid Senator, Egypt; Co-founder, Cairo Liberal Club
Vladimir Fernandes Maciel Professor, Mackenzie Presbyterian University, Brazil
Vanessa Rubio-Marquez Professor and Associate Dean for Extended Education, London School of Economics; Former Senator and Deputy Minister, Mexico
Ben Powell Executive Director and Professor, Texas Tech University
Parth Shah Founder, Centre for Civil Society, India; Director, Indian School of Public Policy
Follow the conversation on Twitter with @ACFPCenter and @AtlanticCouncil using #PathToProsperity
The Freedom and Prosperity Center aims to increase the prosperity of the poor and marginalized in developing countries and to explore the nature of the relationship between freedom and prosperity in both developing and developed nations.
Follow the conversation on Twitter with @ACFPCenter and @AtlanticCouncil using #PathToProsperity