Economic Goals and Values
Australia and Ethiopia
Economic Freedom: Being able to make choices about which goods and services to produce and distribute without government interference or intervention is an economic goal. This freedom allows entrepreneurs to take risks and make choices to start various businesses.
Economic Security and Predictability: Knowing that goods and services will be available when needed. Having a safety net that protects individuals in a time of economic disaster.
Economic Equity: A fair distribution of wealth. Apportionment appears to be similar. Choice by citizen/consumer on which opportunities they will participate with.
Economic Growth and Innovation: Using new ideas and ways of creating goods. Maintaining into the future
How does the achievement of one of the economic goals impact/interfere with the success of other economic goals?
The achievement of one goal may interfere with another goal in several different ways. For example, being able to make choices about which goods and services to produce and distribute without government interference or intervention is an economic goal. But, making the most of resources without waste is also an economic goal. In this case, it is not possible to have both economic freedom and efficiency.
Australia, a free-market democracy, has recorded impressive economic progress without undergoing a single recession for almost 25 years. In addition to its abundant natural resources, the economy has benefited from lasting entrepreneurial development facilitated by an effective system of government, a well-functioning legal system, and an independent bureaucracy.
Economic Efficiency: Australia’s environment, one of the world’s most transparent and efficient, is highly conducive to entrepreneurship. It takes only two days to launch a business. The flexible labor market facilitates dynamic employment opportunities.
~2016 Economic Freedom Score: 80.3 (down 1.1 points)
~Economic Freedom Status: FreeEconomic Security and Predictability: The Australian economy is strong, and remain better placed than most other nations, but Australia is not immune from the global financial crisis. In the midst of the global financial crisis, the Rudd Government is taking decisive action to strengthen the Australian economy.
Economic Equity: The national income for Australia is 42,260.6. The inequality-adjusted HDI (IHDI) is 0.858.
Economic Growth and Innovation: Australia is committed to innovation and science, recognizing that it underpins the country’s growth, economic prosperity, competitiveness and job creation. To foster creativity and entrepreneurship, the Australian Government has launched a National Innovation and Science Agenda – a suite of initiatives to encourage Australians to take on new ideas, embrace risk, increase collaboration between industry and researchers, and develop and attract world-class talent for the jobs of the future.
Ethiopia is Africa’s second most populous country and has one of its fastest growing economies. Economic expansion of around 10 percent over the past five years has been facilitated by improved infrastructure and more effective mining and farming techniques, but growth remains highly vulnerable to external shocks. Weak rule of law and lack of effective implementation undercut policies aimed at promoting open markets. The informal economy provides most jobs for the relatively unskilled labor force.
Economic Efficiency: Requirements still increase the overall cost of conducting business. The underdeveloped labor market continues to trap much of the labor force in the informal sector.
~2016 Economic Freedom Score: 51.5 (no change)
~Economic Freedom Status: Mostly Unfree
Economic Security and Predictability: Ethiopia’s public investments in infrastructure, state enterprises, and human capital amount to 19 percent of GDP — the third-highest rate in the world — and are outrunning the country’s financial capacity. As a result, the government’s hope of achieving its ambitious development goals depends on its willingness to scale back its control of the economy and letting the private sector fill the gap. This will require democratic reforms.
Economic Equity: Some selective governance and economic reforms have already begun. Corruption, as reported by the World Bank, has fallen sharply in recent years, with Ethiopia now earning the highest ranking in East Africa. Additionally, because the public sector plays such a key role in the economy, the government instituted civil service reforms, making Ethiopia second only to Kenya among East African countries in its World Bank ranking of government effectiveness.
Economic Growth and Innovation: Slower growth may, in fact, be a blessing in disguise. The experiences of other countries that have attempted sustained high rates of growth suggest that such approaches create increasingly harmful side effects.Unfortunately, even slower growth may be a moot point. Ethiopia’s state-led development model is ultimately unsustainable if the government lacks the capacity to maintain the required rates of public investment. The only realistic alternative is to scale back state control of the economy, enabling the private sector to drive further growth.