The link between economic freedom and prosperity is shown on the Fraser Institute’s World Index of Economic Freedom.
Nations that are economically free out-perform non-free nations in indicators of well-being
• Nations in the top quartile of economic freedom had an average per-capita GDP of
$37,691 in 2010, compared to $5,188 for bottom quartile nations in 2010 current
international dollars (Exhibit 1.7).
• In the top quartile, the average income of the poorest 10% was $11,382, compared to $1,209 in the bottom in 2010 current international dollars (Exhibit 1.10).
Interestingly, the average income of the poorest 10% in the most economically free nations is more than twice the overall average income in the least free nations.
• Life expectancy is 79.5 years in the top quartile compared to 61.6 years in the
bottom quartile (Exhibit 1.11).
• Political and civil liberties are considerably higher in economically free nations than in unfree nations (Exhibit 1.12).
Calls for government regulation and protection are getting stronger but this shows that it’s more economic freedom not less that we need.
The index measures the degree to which the policies and institutions of countries are supportive of economic freedom.
It is based on the cornerstones of economic freedom: personal choice, voluntary exchange, freedom to compete, and security of privately owned property.
Forty-two variables are used to construct a summary index and to measure the degree of economic freedom in five broad areas:
1 Size of Government;
2 Legal System and Property Rights;
3 Sound Money;
4 Freedom to Trade Internationally;
The top 10 countries are:
In this year’s index, Hong Kong retains the highest rating for economic freedom,
8.90 out of 10. The other top 10 nations are: Singapore, 8.69; New Zealand, 8.36;
Switzerland, 8.24; Australia, 7.97; Canada, 7.97; Bahrain, 7.94; Mauritius, 7.90;
Finland, 7.88; and Chile, 7.84.
• The rankings (and scores) of other large economies in this year’s index are the United Kingdom, 12th (7.75); the United States, 18th (7.69); Japan, 20th (7.64); Germany, 31st (7.52); France, 47th (7.32); Italy, 83rd (6.77); Mexico, 91st, (6.66); Russia, 95th (6.56); Brazil, 105th (6.37); China, 107th (6.35); and India, 111th (6.26).
• The scores of the bottom ten nations in this year’s index are: Venezuela, 4.07;
Myanmar, 4.29; Zimbabwe, 4.35; Republic of the Congo, 4.86; Angola, 5.12;
Democratic Republic of the Congo, 5.18; Guinea-Bissau, 5.23; Algeria, 5.34; Chad, 5.41; and, tied for 10th worst, Mozambique and Burundi, 5.45.