NZ 3rd for economic freedom

24/09/2013

New Zealand has maintained its 3rd place in world economic freedom.

It is no coincidence that countries which rank highly on economic freedom also do well on Transparency International’s perception of corruption index.
Economic constraints are more likely to lead to corruption as people seek to get round the rules by whatever means they can.
The Fraser Institute’s Economic Freedom of the World report began with 101 countries in 1980 and rated
152 this year.

The new countries added to the index (with data for both 2010 and 2011) are Brunei Darussalam, Cape Verde, The Gambia, Lebanon, Suriname, Swaziland, Tajikistan,Timor-Leste, and Yemen. Because of the civil war and the unreliability of the data since 2011, the rating for Syria has been temporarily suspended, though historical data are included in Chapter 2: Country Data Tables.

Top-rated countries
Hong Kong and Singapore, once again, occupy the top two positions. The other nations in the top ten are New Zealand, Switzerland, United Arab Emirates, Mauritius, Finland, Bahrain, Canada, and Australia.
Other major countries
The rankings of some other major countries are: United Kingdom (12th), United States (17th), Germany (19th), Japan (33rd), South Korea (33rd), France (40th), Italy(83rd), Mexico (94th), Russia (101st), Brazil (102nd), India (111th), and China (123rd).
Lowest-rated countries
The ten lowest-rated countries are: Algeria, Democratic Republic of Congo, Burundi, Central African Republic, Angola, Chad, Zimbabwe, Republic of Congo, Myanmar, and, in last place, Venezuela. Eight of the countries in the bottom ten are located in Africa.
Economic freedom is not just important for its own sake but for the benefits it brings.
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 GDPof $36,446 in 2011, compared to $4,382 for nations in the bottom quartile in2011US(PPP) dollars (Exhibit 1.6)
In the top quartile, the average income of the poorest 10% was $10,556, compared to $932 in the bottom quartile in 2011US(PPP) dollars (Exhibit 1.9). 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 79.2 years in nations in the top quartile compared to 60.2 years in those in the bottom quartile (Exhibit 1.10).
Political and civil liberties are considerably higher in economically free nations than in unfree nations (Exhibit 1.11).
The cornerstones of economic freedom are:
 (1) personal choice, (2) voluntary ex change coordinated by markets, (3) freedom to enter and compete in markets, and (4) protection of persons and their property from aggression by others. Economic freedom is present when individuals are permitted to choose for themselves and engage in voluntary transactions as long as they do not harm the person or property of others. While individuals have a right to their own time, talents, and resources, they do not have a right to those of others. Thus, individuals do not have a right to take things from others or demand that others provide things for them. The use of violence, theft, fraud, and physical invasions are not permissible in an economically free society, but otherwise, individuals are free to choose, trade, and cooperate with others, and compete as they see fit.

To a large degree, the EFW measure is an effort to identify how closely the institutions and policies of a country correspond with the ideal of a limited government, where the government protects property rights and arranges for the provision of a limited set of “public goods” such as national defense and access to money of soundvalue, but little beyond these core functions. In order to receive a high EFW rating, a country must provide secure protection of privately owned property, even-handed enforcement of contracts, and a stable monetary environment. It also must keep taxes low, refrain from creating barriers to both domestic and international trade, and rely more fully on markets rather than government spending and regulation to allocate goods and resources. In many ways, a country’s EFW summary rating is a measure of how closely its institutions and policies compare with the idealized structure implied by standard textbook analysis of microeconomics. . . .
The principles of economic freedom are National Party principles and have been reflected in policies which reduce the burden of government, liberalise trade, relax labour laws, cut personal and business tax rates, support a stable monetary environment and trust individuals and markets.
Green Party policies have always threatened those principles. Labour’s lurch left increases the threat of less economic freedom and the lower growth and poorer well being that will follow should they get into government.

Economic freedom helps prosperity

20/09/2012

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;
5 Regulation

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.

 Not Pc notes:
. . . Curious to note that around half of the top ten places are those in which the British came, saw and then buggered off, leaving behind them rule of law and the British legal and common law system. Thank Galt for the Brits, eh. . . 

 


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