The latest edition of Max BordersIdeas Matter update highlights additional evidence of the benefits associated with economic freedom.

Since the collapse of the Soviet Union, some countries have done better than others. The question of whether capitalism has succeeded or failed in these countries is the degree to which the countries have actually embraced capitalism. In other words, institutions matter. And some countries adopted better rules than others. Adding to Professor Yakovlev’s analysis, let’s consider some of the evidence.

I picked out three post-Soviet countries at the Heritage Freedom Index to see whether free institutions help with economic performance. The Heritage Index measures free institutions on a number of dimensions and ranks countries accordingly. …

… let’s look at GDP growth in these countries. Estonia, the most economically free country has grown at a pretty brisk clip. With the exception of the years of global recession in 08 and 09, Estonia has averaged growth rates in excess of 6%.

By contrast, Poland, which is less economically free on these important dimensions, has been hovering at around 2 percent growth on average — (I looked at data back to 1996.)

So what do we find in Georgia — a country that has been beset with problems but has managed to liberalize it’s institutions in recent years? It’s hard to deny the improvement.