Nobel Laureates Call For Focus On Economic Freedom
Release Date: 26 June 2002
Governments that are serious about fighting global poverty and terrorism should do more to promote economic freedom, say economics Nobel Laureates Milton Friedman and Gary Becker.
Their comments were made in the context of the release of the Economic Freedom of the World: 2002 Annual Report, in Calgary, Canada. The report is published by Canada’s Fraser Institute and a network of policy organisations that includes the New Zealand Business Roundtable.
“Economic freedom has been gaining ground around the world,” Walker said. “This has spurred a worldwide increase in wealth, unprecedented poverty reduction, and an impressive lowering in inequality, as numerous peer-reviewed, fact-based research papers have shown.”
The 2002 report is the 6th in a series. It ranks 123 nations on 37 variables with data back to 1970. Economic freedom is based on personal choice, voluntary exchange, freedom to compete, and protection of the person and property. This requires the rule of law, property rights, limited government intervention, freedom to trade, and sound money.
“Economic freedom advances economic growth, reduces poverty and promotes other civil and political freedoms,” Friedman said. “It is also a tonic against terrorism because of the opportunity it creates. All of the nations behind global terrorism lack economic freedom.”
Nations that score in the top fifth of the economic freedom rankings have an average per capita income of US$23,450 and average economic growth of 2.6 per cent a year; while those in the bottom fifth had an average per capita income of $2,560 and negative economic growth of 0.9 per cent. Economic freedom is also positively correlated with low poverty rates, superior health and nutrition outcomes, literacy, low levels of child labour, civil and political freedoms, superior rankings on the United Nations Human Development Index, and low levels of corruption.
Copies of Economic Freedom of the World: 2002 Annual Report can be obtained by contacting Suzanne Walters, Director of Communications, The Fraser Institute on +604 714-4582 (Email firstname.lastname@example.org). It is also available on the Fraser Institute’s website at www.fraserinstitute.ca. The complete data set can be downloaded at www.freetheworld.com.
Highlights From the 2002 Report
- Hong Kong retains the highest rating for economic freedom 8.8 of 10, closely followed by Singapore at 8.6, the United States at 8.5, and the United Kingdom at 8.4.
- The other top 10 nations were New Zealand, Switzerland, Ireland, Australia, Canada, and the Netherlands.
- The rankings of other large economies are Japan, 24; Germany, 15; Italy, 35; France, 38; Mexico, 66; China, 101; India, 73; Brazil, 82; and Russia, 116.
- Economic freedom continues to gain ground globally. The average economic freedom rating was 6.39 for 2000 (the most recent year for which data is available) up from 5.99 in 1995. Economic freedom decreased through the 1970s, falling from 5.98 in 1970 to 5.32 in 1980. It has been on the rise since then.
- Most of the lowest ranking nations are in Africa, Latin America and former communist states.
- Botswana has the best record for an African nation, tied with 6 other nations, including France and South Korea, at 38. Chile, with the best record in Latin America, was tied with three other nations at 15.
- The bottom five nations were the Democratic Republic of the Congo, Myanmar, Guinea-Bissau, Algeria and Ukraine. However, a number of other nations for which data are not available, such as North Korea and Cuba, may have even less economic freedom.