An environment of economic freedom allows for the discovery process required for societal economic progress

From Doing Bad by Doing Good: Why Humanitarian Action Fails by Christopher J. Coyne. Page 188.

To provide evidence for Gunter’s position, consider the annual Doing Business index produced by the World Bank. The index considers several basic categories (obtaining construction permits, access to electricity, paying taxes, enforcing contracts, and so on) involved in starting a business. Therefore, the index serves as one proxy for the broader environment of economic freedom as it captures the ease of acting on perceived entrepreneurial opportunities to provide consumers with goods and services they value. In 2012, Iraq ranked 164th out of 183 countries, making it one of the most difficult places in the world to open a new business and implying that the U.S. efforts, which started in 2004, did little to remedy the situation. This makes sense when one considers that the U.S. government’s strategy placed state-led investment and development at the forefront while downplaying the process of individual discovery and experimentation. An alternative, given that the occupation was taking place, would have been to work to remove barriers and lower the cost to private Iraqi citizens of starting a business when the perceived opportunity for profit presented itself. However, this alternative did not occur to the man of the humanitarian system, who was instead focused on spending to meet predetermined targets that ended up having little impact in terms of permanently improving the standards of living of Iraqi citizens.

As another, broader example, consider the Millennium Development Goals (MDGs), which consist of eight milestones that all 193 UN member states, in addition to dozens of international organizations, have agreed to reach by 2015.34 The eight MDGs are (1) eradicate extreme poverty and hunger; (2) achieve universal primary education; (3) promote gender equality and empower women; (4) reduce child mortality rates; (5) improve maternal health; (6) combat HIV/AIDS, malaria, and other diseases; (7) ensure environmental sustainability; and (8) develop a global partnership for development.

Within the eight MDGs, there is little to no focus on removing specific barriers to economic freedom to allow for individual discovery. Only one target within Goal 8—Target 8A: Develop further an open, rulebased, predictable, nondiscriminatory trading and financial system—makes mention of removing international barriers to exchange and, as William Easterly has pointed out, this “trade-related MDG received virtually no attention from the wider campaign, has seen no action, and even its failure has received virtually no attention. . . . ” This general neglect illustrates the dominant mentality whereby removing barriers to individual discovery take a backseat, if they are given a seat at all, to state-led actions intended to improve the human condition. This is problematic since, as discussed, an environment of economic freedom allows for the discovery process required for societal economic progress, which, in addition to increasing wealth, is instrumental in achieving the other MDGs.

Both the Iraq and MDGs examples illustrate that the dominant mentality neglects the importance of removing barriers to discovery. These examples also illustrate another unfortunate characteristic of state-led humanitarian action—the outward focus of “fixing” other countries as compared to the inward focus on domestic policy changes that can benefit those who are suffering in other societies. Instead of focusing outward, the constrained approach indicates that governments in relatively developed countries would do better to focus on removing domestic barriers to economic freedom. Removing these barriers would benefit domestic citizens while also opening up markets to those in relatively underdeveloped societies as well, increasing the extent of the market and allowing them to participate in the process of development as discovery.