Recently, economic growth has been related to productivity. Most of experts agree that productivity comes from innovation and development with research (R+D+I), and those at the same time with imagination.
Imagination can be poisoned with planning, Administration and burocracy. We plan to avoid unforesees but precisely that is imagination, unforeseeable.
However, imagination also can be fertilized,
- with policies encouraging education (or human capital).
- with policies encouraging trust. Tim Harford wrote the following in an article few days ago: "trust in its broad definition would explain basically all the difference between the income of USA and Somalia". Building stable and reliable institutions is a policy that fosters peoples imagination and thus economic growth.
- and finally, generating incentives. Incentives to imagination or also called: economic freedom, civil freedom and political freedom.