The Poor, Africa, and Californial need Less Government and More Economic Freedom

From the Heritage Foundation’s Insider — three separate articles on a common sense topic regarding the poor, Africa, and California:

What would really help the poor is less government and more economic freedom. In a new report, Daren Bakst and Patrick Tyrell show that government is very good at doing two things: foreclosing opportunities for the poor by raising the costs of employing low-skilled labor and the costs of starting a small business; and making basic consumer goods that everyone needs—and that the poor spend a disproportionate share of income on—more expensive. Restrictions on trade are a prime example of the second problem. Bakst and Tyrell write:

If we want to create more opportunities for the poor, then we need a lot less government and a lot more economic freedom. California is a terrible place to try to buy a home, and the reason is all the people who already own homes. A case about grants for coating playgrounds with rubber could have a big impact on school choice programs. Canada’s corporate tax rate is lower than that of the United States, yet produces more revenue as a share of the economy.

Read more: Heritage Foundation

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Africa needs more economic freedom. Iain Murray and Daniel Press write:

“One of the development community’s most often cited priorities is the need for African economies to ‘formalize’ their economies. This means shifting business activities from operating outside a country’s legal framework toward a status recognized and protected by law. There are many benefits to formalization. Registered companies have greater productivity and investment, create more jobs and growth, and enjoy legal protection against fraud for both themselves and their customers. They also have access to credit and capital, which provide s opportunities for growth.

“Studies conducted across Sub-Saharan Africa estimate the informal economy accounts for some 50 to 80 percent of the region’s GDP, 60 to 80 percent of employment, and as much as 90 percent of new jobs. This shadow economy is a natural response to the stifling restrictions governments place upon businesses. As Nigerian political commentator Olumayowa Okdediran notes: ‘Without the rule of law, it’s quite difficult to make a living, but people do it. They rely, not on the state, which is often a failure, but on traditional African customary law.’ So while informal economies may be a necessity, driving so much economic activity underground creates insecurity that stunt s development, distort s the rule of law, hinder market formation, and impede s growth.”

Read more: Competitive Enterprise Institute

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Californians need more economic freedom—especially in the housing market. A new report by Kerry Jackson catalogs all the ways the state has made it hard to build new housing—leading to Californians facing the third highest median home price in the country. The barriers include California’s Environmental Quality Act, which imposes onerous environmental impact statement requirements and allows opponents of development to litigate against construction; affordable housing mandates; density controls; rent control; minimum parking space requirements; and excessive permit fees. On top of all that, a mindset of NIMBYism and BANANAism pervades the state, writes Jackson:

“NIMBYs: Not every CEQA challenge is based on environmental concerns. Hoover’s Kaye says CEQA ‘provides an easy litigation path to almost anyone who wants to block a development project.’ The Not In My Back Yard (NIMBY) special interests who simply don’t want further development in or near their neighborhoods commonly use CEQA to thwart projects.”

Read more: Pacific Research Institute (Here is the cached version.)