World Index of Economic Freedom for '07 released

[Caelius]

The List

Executive Summary

It actually came out two weeks ago but the report pretty much indicates the relative "health" of a nation economically, and to a lesser extent politically. Overall it's detailed how even though it was stalled last year, the global economy is projected to expand this year despite a number of countries/regions needing improvement with their current economic models.

Here's some articles:

Link

WASHINGTON, Jan. 16 /PRNewswire-USNewswire/ -- Following is a release from The Heritage Foundation:

The move toward greater economic freedom worldwide stalled over the last year, according to the 13th annual Index of Economic Freedom, released today by The Heritage Foundation and The Wall Street Journal.

The 157 nations rated in the new Index received an average economic freedom score of 60.6 (on a scale in which 100 represents ideal economic freedom). That's down slightly (0.3 percentage points) from the previous year's average, but still rates as the second highest level of freedom in Index history.

Index editors Tim Kane, Kim Holmes and Mary Anastasia O'Grady express regret that "the march toward greater economic freedom halted, especially since 13 years of Index data strongly suggest that countries that increase their levels of economic freedom experience faster growth rates."

Hong Kong and Singapore, the economic jewels of Asia, finished 1st and 2nd in the rankings for the 13th straight year. Australia jumped from 9th to 3rd, giving Asia a sweep of the top three spots and, with New Zealand at number 5, four of the top 10.

Europe also placed four countries in the top 10: the United Kingdom, Ireland, Luxembourg and Switzerland. For the first time, "Americas" is listed as a separate region. The United States finished 4th worldwide, joining Canada (10th) as the sole representatives of this region in the top 10.

This year's Index, the editors point out, provides an even more precise snapshot of economic freedom than its predecessors. It uses a new methodology that draws upon the best and latest information, including World Bank data that only recently became publicly available. The editors also assembled an academic advisory board, which reviewed the methodology to ensure it reflects the details of each country's policies.

Two of those experts, Xavier Sala-i-Martin (a professor at Columbia University) and Johnny Munkhammer (an economist with the Swedish think tank Timbro) contributed chapters to this year's Index. Sala-i-Martin's explains the importance of globalization. He found that poverty is retreating as a result of international economic growth. Munkhammer, meanwhile, focuses on the dangers of an over-regulated labor market. "The free market is a superior institution for labor, yielding the best results for society and workers," he found.

The 2007 Index also uses a new rating system. Countries are ranked on a 0- to-100 scale, with a higher score representing greater freedom -- a switch from the 5-1 ranking of previous Indexes (in which lower numbers denoted greater freedom). Scores and rankings for all previous years have been updated to reflect the new approach.

This year's edition measures economic freedom within 10 specific categories (as previous Indexes did), but the editors made important changes here as well. The new Index measures "labor freedom" for the first time and emphasizes entrepreneurship as a segment of the "business freedom" factor. The other categories are: trade freedom, fiscal freedom, freedom from government, monetary freedom, investment freedom, financial freedom, property rights and freedom from corruption. Scores in these categories are averaged to create an overall score.

The Most Free:

* Hong Kong (1st)
* Singapore (2nd)
* Australia (3rd)
* United States (4th)
* New Zealand (5th)
* United Kingdom (6th)
* Ireland (7th)
* Luxembourg (8th)
* Switzerland (9th)
* Canada (10th)


The Least Free:

* Guinea-Bissau (148th)
* Angola (149th)
* Iran (150th)
* Congo (151st)
* Turkmenistan (152nd)
* Burma (153rd)
* Zimbabwe (154th)
* Libya (155th)
* Cuba (156th)
* North Korea (157th)


The Index finds that only seven of the 157 countries graded scored 80 or higher, making them "free" economies. Another 23 countries earned 70-79.9 points and are characterized as "mostly free" economies. 48 of the countries surveyed are "moderately free" (with scores between 60 and 69.9) while 59 are "mostly unfree" (scores from 50 to 59.9). The remaining 20 countries are economically "repressed" (with scores lower than 50).

"Among specific economies during the past year, the scores of 65 countries are now higher and the scores of 92 are now lower," the editors write, noting that losers outnumbered gainers 3 to 2. But they express optimism about the future spread of economic freedom: Since China and India are both in the "mostly unfree" category, "when they further open their economies to globalization, the rise in global prosperity is poised for very large increases," they write.

Across the five regions, Europe is the most free, with an average score of 67.5. The Americas follow at 62.3, with the remaining regions below the world average. Yet, "trends in freedom are mirrored closely across all regions, and in each region, the richest countries tend to be those with the strongest economic freedoms," the editors note.

Asia-Pacific

What makes Asia unique is the variance in the region. Hong Kong and Singapore continue to lead the world in economic freedom, along with other former British colonies Australia and New Zealand.

Meanwhile, Turkmenistan, Vietnam, Laos, Bangladesh and Burma are all "repressed," and North Korea remains the world's least-free economy. In all, 13 countries in the region improved their Index scores from 2006, while 16 declined. Vietnam remained unchanged.

Europe

This year's Index separates Europe from North America.

A majority of the world's 20 freest countries are in Europe, and it produces one quarter of the world's economic output. The United Kingdom is the highest-rated European country, ranked 6th worldwide, followed immediately by Ireland at 7th, Luxembourg at 8th and Switzerland at 9th.

However, Europe suffers from the second-worst regional score in labor freedom and is last in fiscal freedom and freedom from government. Overall, 26 economies lost ground in economic freedom and 15 did better.

The Americas

This year, Latin America and the Caribbean are categorized along with North American economies in a single region.

The United States (4th) Canada (10th) and Chile (11th) all made the top 20 this year, and the Americas has been the second-highest region in terms of freedom since 1999, when it was the world leader.

However, the rise of socialists including Evo Morales (Bolivia) and Hugo Chavez (Venezuela) is dragging the region down. Overall, 18 countries saw their scores decline, while 11 improved. Canada remained the same.

North Africa and the Middle East

This is the only region to increase its average economic freedom score over the last year, but it still lags the rest of the world. Most of its economies are not free.

Israel is ranked only 37th in the world, but leads this region. Bahrain is a close second at 39th. At the other end of the scale are Syria, Iran and Libya. Overall 12 countries improved their scores, while only five lost ground.

Sub-Saharan Africa

The region is still without a free economy, and is well-known as the poorest and most violent region in the world. Africa's overall level of economic freedom is weaker than any other region's and declined in the past year.

Mauritius marks a bright spot of sorts, leading the region and finishing with a score of 69 -- almost reaching "mostly free" status. Botswana is next, followed by South Africa. On the other hand, Zimbabwe is last in the region. It faces myriad problems, including 80 percent unemployment and a 350 percent inflation rate.

Overall, 24 sub-Saharan countries lost ground, while 15 gained some economic freedom. Niger held steady.

There's a lot of other articles that can be found on the report which are listed here.

[ErikinWest]

Lol, I've already linked this in a couple of posts.

Erik

[Carach]

most of the most free are ex british provinces...

[ForgottenImmortal]

most of the most free are ex british provinces...

Of course all of this has entirely to do with British colonization. . .

[Warmaster]

Of course all of this has entirely to do with British colonization. . .

Well it does really. I guess its because all of the ex-British colonies are all reasonably stable and well led these days. Who can say if they wouldve been better or worse under another power, but its irrelevant.

On a side note: Im REALLY surprised NZ came in anywhere near the top. #5 is a damn sight better than i wouldve predicted.

[ForgottenImmortal]

Well it does really. I guess its because all of the ex-British colonies are all reasonably stable and well led these days. Who can say if they wouldve been better or worse under another power, but its irrelevant.

On a side note: Im REALLY surprised NZ came in anywhere near the top. #5 is a damn sight better than i wouldve predicted.

What about other British colonies like, lets see most of Africa, India, Iraq, Egypt, Afghanistan, Iran (commercially controlled anyways), or Belize. There are a long list of failed states the British colonized as well as successful states.

[Primvs Sextvs Loverlord]

What about other British colonies like, lets see most of Africa, India, Iraq, Egypt, Afghanistan, Iran (commercially controlled anyways), or Belize. There are a long list of failed states the British colonized as well as successful states.

Afghanistan was never a British colony.
However, I agree with you on the point that many, if not most, ex-British colonies are in a very terrible condition indeed.

[carl-the-conqueror]

What about other British colonies like, lets see most of Africa, India, Iraq, Egypt, Afghanistan, Iran (commercially controlled anyways), or Belize. .

india is doing quite welll for a country its size imo, when comparing to say china brazil or indonesia. iraq was only protected by british because of a mandate same for eypt afghanistan was never conquered, and iran was controlled by other countries as well. and we all agree that south africa and kenya are doing better than the congo, despite the congo having greater miniral wealth.

[Erik]

Of course all of this has entirely to do with British colonization. . .

It does, actually.
"economic freedom" is mainly a White Anglo-Saxon ideal.
Almost all other cultures prefer personal freedom and good standard of living over economic freedom.

[Ahiga]

It does, actually.
"economic freedom" is mainly a White Anglo-Saxon ideal.
Almost all other cultures prefer personal freedom and good standard of living over economic freedom.

Because they don't have those. When they do, would they still prefer those or prefer economic freedom on top of those?

[Tiwaz]

Because they don't have those. When they do, would they still prefer those or prefer economic freedom on top of those?

It really depends on "economic freedom".

Like I said, I prefer this less "free" system over one where I am free to pay much more for medicine as an example.

Or one where employer is free to toss any crap they want on me and I have no decent legal defences set (free employment etc).

[Erik]

Because they don't have those. When they do, would they still prefer those or prefer economic freedom on top of those?

We experienced with a little of both, and found a reasonable balance between economic freedom and not letting people starve to death in ghetto's.

The list suggests that 100% economic freedom is the best.
But I think the optimum lies around 75%. (call me a moderate).

[Erich von Manstein]

Almost all other cultures prefer personal freedom and good standard of living over economic freedom.

You might want to expound upon your definiton of "personal freedom." Many people stand to be confused since "personal" freedom or liberty is generally considered (in the traditional context, at least) to be freedom from the government. This would result in people applying the traditional definiton to take your comment to be an oxymoron, since a government that attempts to apply a good standard of living to all is also going to be a government that takes a very heavy-handed approach to governing its citizens. I have a hunch that your definition of "personal freedom" is more akin to FDR's "freedom from want." It's a tad bit misleading in your context, however, and tends to rile up libertarians like myself , especially since the basic tenet of classical liberalism (and one yet to be disproven by history) is that personal freedom cannot exist without economic freedom and vice versa.

[Erik]

You might want to expound upon your definiton of "personal freedom."

I think it's pretty clear what it means: the freedom that individuals enjoy.

Many people stand to be confused since "personal" freedom or liberty is generally considered (in the traditional context, at least) to be freedom from the government.

Why limit it to freedom from the government?

To me it's freedom from the government AND anyone/anything else that can limit your freedom.

Did the people of Somalia enjoy 100% personal freedom when they had no government? - of course not.

This would result in people applying the traditional definiton to take your comment to be an oxymoron, since a government that attempts to apply a good standard of living to all is also going to be a government that takes a very heavy-handed approach to governing its citizens.

Not an oxymoron.
It just means that certain (government) actions can both increase and decrease your personal freedom at the same time.

I think both a lack of government (Somalia/Libertarianism) and too much government (USSR/Communism) reduce your personal freedom.
A perfect, 100% free, world can't exist so the best we can do is find a good balance between Libertarianism and communism.

the basic tenet of classical liberalism (and one yet to be disproven by history) is that personal freedom cannot exist without economic freedom and vice versa.

And the basic tenet of Communism is that personal freedom can't exist without complete government control of the economy.

And the basic tenet of Christianity is that personal freedom can't exist without following the way of Christ.

Doesn't make any of them right.

Notice their circle arguments:
I think A requires B, therefore B is necessary for A.
But since their tenets are disputed they have proven nothing.

[ErikinWest]

It does, actually.
"economic freedom" is mainly a White Anglo-Saxon ideal.
Almost all other cultures prefer personal freedom and good standard of living over economic freedom.

Ahaha! Are you saying the countries with more economic have less political and personal freedom?!

If you want to look at what perfect capitalism does to a country, look at Indonesia as an example. The entire constitution and financial institutions of the country were rewritten after the 1965 coup of Suharto, rewritten by US industrialists and other capitalists.

That is quite honestly offensive. I am from Indonesia, and I have good knowledge of its history. Simply put, that statement is nonsense. Indonesia has never been a capitalist nation. What you're referring to is not capitalism. Big multinational firms used the corrupt court systems to destroy competition, and monopolize of products. Considering what this article is about, you're welcome to look at Indonesia's economic freedom, which has always been very low.

Erik

[Erik]

Ahaha! Are you saying the countries with more economic have less political and personal freedom?!

HAHAHAHA!!!! of course that's not what I said.
You can read, can't you?

[Shigawire]

That is quite honestly offensive. I am from Indonesia, and I have good knowledge of its history. Simply put, that statement is nonsense. Indonesia has never been a capitalist nation. What you're referring to is not capitalism. Big multinational firms used the corrupt court systems to destroy competition, and monopolize of products. Considering what this article is about, you're welcome to look at Indonesia's economic freedom, which has always been very low.
Erik

Well of course. Rhetoric doesn't match reality. That is exactly my point. That is how they play with words. What really was imposed was a Plutocracy. Indonesia was hailed by the mass media as a "shining beacon of light in the region" - even while they were carrying out the genocide in East Timor, virtually unreported. What happens in these circumstances is that a power from without imposes what they call "deregulation" on economies of 2nd and 3rd world countries, while in fact they mean deregulation in favor of the very few corporations that are "in the loop." Sometimes they are for genuine deregulation, but the times they have been disingenuous about deregulation are numerous.

The overthrow of Iran's democratic government in 1953 was actually planned by British Petroleum (then AIOC - Anglo-Iranian Oil Company). The plan (Operation Ajax) was then adopted by the CIA - given the go-ahead by Eisenhower to be carried out. What you got in Iran wasn't much of a "free" economy either, it was an externally imposed market centralization - plutocracy, with a fascist puppet in place - but that doesn't mean it wasn't hailed as "free" and wonderful in the mass media. This is the entire point.
Rhetoric and reality never matches.

So I take the Elites' definition of "capitalism" to mean "rule by the wealthy" - which isn't what it says in the encyclopedia. But then again, the encyclopedic definition of "democracy" doesn't exactly fit Walter Lippmann and Edward Bernays' idea of a "democracy."

[ErikinWest]

most of the most free are ex british provinces...

The ethnic Anglo-Saxon economies yes, the non-white ones, no.

Erik

[Last Roman]

The ethnic Anglo-Saxon economies yes, the non-white ones, no.

Erik

haha, my dubious racial theories have been proven true!

[Freddie]

most of the most free are ex british provinces...

[When ones country has ruled 1/4 of the earth it stands to reason that you find familiar names pop up on lists such as this.

To be honest the list doesn't through up any surprises, the 10 nations are what I would have expected it to be.