THE IMPACT OF ECONOMIC FREEDOM
October 4, 2006
The Fraser Institute's "Economic Freedom of the World," has played an important role in advancing the understanding of freedom and efficiency, and has become a key research tool to investigate the impact of economic freedom in countries, says Fred McMahon, Director of the Center for Globalization Studies at the Fraser Institute.
For instance, findings include:
- Countries with more economic freedom have substantially higher per capita incomes -- $2,998 in the least free quartile to $24,402 in the most free.
- Growth rates are higher in more economically free countries, from an average of -0.2 percent in the least free to 2.1 percent in the most free.
- Life expectancy is over 20 years longer in countries with the most economic freedom than it is in those with the least.
- Political rights and civil liberties increase substantially in countries as economic freedom increases.
Overall, the research suggests that economic freedom liberates people from dependence on -- and abuses by -- government, and thus opens the door for increases in other freedoms, not just material ones.
As for individual countries, on a scale of one to 10, with 10 being highest, key findings include:
- The average economic freedom score has risen from 5.1 in 1980 to 6.5 in 2004.
- Hong Kong had the highest rating for economic freedom at 8.7, closely followed by Singapore at 8.5.
- The United States, New Zealand and Switzerland tied for third with ratings of 8.2.
- At the bottom of the list, China and Russia ranked 95th and 102nd, respectively, in terms of their economic freedom.
Source: Fred McMahon, "Ten Years of Economic Freedom," Fraser Forum, September 2006.
Browse more articles on Economic Issues