The dissertation verifies an old and often repeated pledge of Adam Smith that market liberalism increases the wealth of its citizens in the long-run and contrast it with the most salient counterclaim that citizens pay for wealth with inequality. Starting with a conceptual discussion of what market liberalism is, the dissertation guides through its measurement and discusses issues of comparability. Subsequently, the degree of market liberalism of governments within democracies are related to most-likely policies such as deregulation and less redistribution via decreased taxes and lower welfare spending. Finally, policies are linked to performance using structural equations and long-time frames. It turns out that market liberal governments have a negative short-term effect on wealth and a positive long-term effect in comparison to more moderate governments. However, the effect on wealth is very marginal whereas inequality is substantially increased in the short- as well as in the long-run
