Economic Freedom Leads to Greater Democracy and Prosperity
July 24, 2003
Freeing people economically unleashes individual drive and initiative and thus puts a nation on the road to economic growth, according to the Economic Freedom of the World: 2003 Annual Report, published jointly by the Fraser Institute, the Cato Institute and the Economic Freedom Network.
The key ingredients of economic freedom, says the report, are personal choice, voluntary exchange, freedom to compete and the protection of person and property. Using 38 variables for each country, the report measures the institutions essential to ensuring the rule of law, property rights, freedom to trade, sensible regulation and reasonably sized government.
According to the report:
- The United States has the world's third highest level of economic freedom.
- The United States scores very highly on legal structure, property rights, sound money and freedom to trade.
- Its overall rating, however, slightly decreased from 8.5 (out of 10) in 2000 to 8.3 in 2001.
The report notes that Hong Kong is the most economically free, followed by Singapore, the United States, New Zealand and the United Kingdom.
The rankings of other large economies are Canada, 6; Germany, 20; Japan, 26; Italy, 35; France, 44; Mexico, 69; China, 100; India, 73; Brazil, 82; and Russia, 112. The bottom five nations are Guinea-Bissau, Algeria, Zimbabwe, the Democratic Republic of the Congo and Myanmar.
Source: James Gwartney, Robert Lawson, Neil Emerick, "Economic Freedom of the World: 2003 Annual Report" The Fraser Institute, July 8, 2003.
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