Economic Freedom Advancing
June 26, 2002
Hong Kong is still the world's freest economy, with Singapore coming in a close second, according to the Economic Freedom of the World: 2002 Annual Report. The report, released yesterday, is published by the Cato Institute, Canada's Fraser Institute and institutes from 54 other countries.
The report's authors, economists James Gwartney and Robert Lawson, found a strong correlation between economic freedom and per capita income, economic growth and life expectancy. That's because economically free societies are more productive, they say. Significantly, the distribution of income is no more unequal in countries with market-oriented economies than in those that are economically repressive.
- Based on 37 objective criteria and using data from 2000, the report found the United States has climbed from fifth to third position in a comprehensive rating of 123 of the world's economies.
- The rankings of other major economies include the United Kingdom (4th), Canada (8th), Germany (15th), Japan (24th), Taiwan (30th), France (38th), Mexico (66th), and India (73rd).
Most of the lowest ranking nations are in Africa and Latin America.
- Botswana has the best record for an African nation, tied at 38th with six other nations including France and South Korea.
- Chile, with the best record in Latin America, was tied with three other nations at 15th.
- Three former communist countries are in the bottom 10: Russia (116th), Ukraine (119th), and Romania (114th) all did worse than communist China (101st).
Data for North Korea and Cuba are not available.
Using data going back to 1970, the report tracks the history of global economic freedom. The conclusion: Economic freedom is on the rise worldwide.
On a 10-point scale, the average economic freedom rating was 6.39 for 2000, up from 5.99 in 1995. Economic freedom decreased through the 1970s, falling from 5.98 in 1970 to 5.32 in 1980, but has been on the rise since then.
Source: James Gwartney and Robert Lawson, "Economic Freedom of the World: 2002 Annual Report" (Vancouver, B.C.: Fraser Institute, 2002).
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