Source of Wealth
This article is fascinating in its implications.
On the World Bank’s rule-of-law index, the United States scores 92 out of a possible 100. The Swiss are even more law-abiding, achieving a score of 99 out of 100. By contrast, Nigeria’s rule-of-law index score is a pitiful 4.8; Burundi’s 4.3; and Ethiopia’s 16.4. The OECD’s average score is 90, while sub-Saharan Africa’s is 28.
The World Bank study notes, “A one-point increase in the rule of law index (on a 100-point scale) boosts total wealth by over $100 in low-income countries, over $400 in middle-income countries, and nearly $3,000 in high-income countries.” So if Nigeria were somehow overnight to become as punctilious as Switzerland, its wealth would rise to $12,168 per person, a $9,420 increase that would more than quadruple the average Nigerian’s wealth. If Americans were to become 100 percent law abiding, our wealth would increase by $24,000, or little more than 5 percent.
It is the stability of government and belief in a system of laws that produces wealth. Business cannot exist without it and neither can individual freedom.