Thursday, July 15, 2004

New report on Economic Freedom of the World

Fraser Institute

Cato Institute Note: the Cato site seems to be under heavy traffic at the moment, you might want to try the Fraser Institute instead.

Hong Kong Tops Economic Freedom List

From the report:
"Hong Kong retains the highest rating for economic freedom, 8.7 of 10, closely followed by Singapore at 8.6. New Zealand, Switzerland, United Kingdom, and United States tied for third with ratings of 8.2. The other top 10 nations are Australia, Canada, Ireland, and Luxembourg. The rankings of other large economies are Germany, 22; Japan and Italy, 36; France, 44; Mexico, 58; India, 68; Brazil, 74; China, 90; and Russia, 114."

"Most of the lowest-ranking nations are African, Latin American, or former communist states. Botswana’s ranking of 18 is by far the best among continental sub-Saharan African nations. Chile, with the best record in Latin America, was tied with four other nations at 22. The bottom five nations were Venezuela, Central African Republic, the Democratic Republic of Congo, Zimbabwe, and Myanmar. However, a number of other nations for which data are not available, such as North Korea and Cuba, may have even less economic freedom."

"The major findings of this analysis were:
(1) economically free countries grow more rapidly
(2) countries with more economic freedom both attract more investment and generate a higher productivity from that investment than countries with less economic freedom
(3) increases in economic freedom during the 1980s and 1990s enhanced growth during the period from 1980 to 2000 (exhibit 2.5)
(4) long-term differences in economic freedom explain approximately two-thirds of the variation in crosscountry per-capita GDP
(5) a legal structure that provides for secure property rights, even-handed enforcement of contracts, and ruleof law is essential if a country is going to grow and achieve a high level of income."

As for Botswana, read this article(DOC-file) by Scott Beaulier.