THE POOR GET RICHER
January 16, 2007
Not only did the world-wide trend toward greater economic liberty hold steady over the past year, but the incomes of poor individuals across the globe are rising as result. The world isn't only growing richer. The gap between the per-capita income of have-not populations and that of the developed world is narrowing, says Mary Anastasia O'Grady, co-editor of the 2007 Index of Economic Freedom.
This good news for human progress is documented in the Index, released today:
- The average freedom score this year for the 157 countries ranked is the second highest since the Index began measuring economic freedom 13 years ago.
- It is down a fraction from last year, but each region of the globe enjoys greater economic freedom than it did a decade ago.
- Hong Kong, Singapore and Australia are the three freest economies in the world this year, in that order.
- The United States ranks No. 4. Among the 20 freest economies in the world, Europe holds 12 places.
As it has in past editions, the 2007 Index also looks at income levels around the globe and finds that economically free countries enjoy significantly greater prosperity than those burdened by heavy government intervention:
The per capita gross domestic product (GDP) of the top quintile of countries, ranked according to economic freedom, is now almost $28,000 while the bottom quintile is less than $5,000. The associated higher GDP rates that come with economic freedom "seem to create a virtuous cycle, triggering further improvements in economic freedom. The 13 years of Index data strongly suggest that countries that increase their levels of freedom experience faster growth rates, says O'Grady.
Source: Mary Anastasia O'Grady, "The Poor Get Richer," Wall Street Journal, January 16, 2007; Mary Anastasia O'Grady, Tim Kane and Kim R. Holmes, "2007 Index of Economic Freedom," Heritage Foundation/Wall Street Journal, January 16, 2007.
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