Common Ground in Promotion of Entrepreneurship and Human Rights

Abstract

A failure in providing human rights is generally due to at least four factors: bad governance, vested interests, cultural factors and poverty. We cannot eliminate human rights violations without a local countervailing power sustained by good governance. Local entrepreneurs, who are essential for creation of sustainable broad-based wealth, can provide just such countervailing power. This paper studies joint action by advocates for entrepreneurship on the right side of the political spectrum with advocates for human rights on the left. The statistically testable hypothesis here is that joint advocacy will not be at cross-purposes. Accordingly, we analyze data for seven variables dealing with governance, corruption, entrepreneurship activity, human rights, capital markets and economic freedom. The significant correlations between pairs of variables from left and right wings support a joint action. Somewhat surprisingly, borrowers from countries having a poor human rights record do not pay a significantly higher interest rate penalty in capital markets. An appendix lists 50 items involving economic freedoms, of which only 10 might lead to disagreements. If the two sides focus on what they agree and support a centrist position, they can become a formidable joint force in favor of higher living standards and improved human rights around the world.

Keywords: Good governance, Cost of capital, Corruption, Economic Growth, Economic Freedom, Left-Right, Multinationals

JEL Classification: M13, O15, O16, G18, H89, K11, K32