Global economic freedom drops slightly
Finland scores best within the EU – link between economic freedom and prosperity is undeniable
Brussels, October 7, 2014
The Economic Freedom of the World Report 2014 will be launched in Brussels on 7 October at an event organized by the Friedrich Naumann Foundation for Freedom and Fraser Institute. Olli Rehn, Vice-President of the European Parliament will open the event with some remarks on economic freedom in Europe.
Although most EU member states rank within the top 40 out of 151 countries, many countries still perform poorly on economic freedom in Europe. Once more, it is striking that between the highest ranking EU member state, Finland on rank 10, and the lowest, Slovenia on rank 105, the gap in economic freedom remains big within the EU.
Hong Kong again topped the worldwide ranking, followed by Singapore, New Zealand and Switzerland. Globally, the average economic freedom score dropped slightly to 6.84 out of 10 from 6.87 last year.
The United States, once considered a bastion of economic freedom, now ranks 12th in the world, tied with the United Kingdom. Due to a weakening rule of law, increasing regulation, and the ramifications of wars on terrorism and drugs, the United States has seen its economic freedom score plummet in recent years, compared to 2000 when it ranked second globally.
Once again, Venezuela has the lowest level of economic freedom worldwide, with the Republic of Congo, Zimbabwe, Argentina and Algeria rounding out the bottom five countries.
“The link between economic freedom and prosperity is undeniable. The most economically free countries offer the highest quality of life and personal freedoms while the lowest-ranked countries are usually burdened by oppressive regimes that limit the freedom and opportunity of their citizens,” said Fred McMahon, Dr. Michael A. Walker Research Chair in Economic Freedom with the Fraser Institute.
“Hong Kong’s number one rating based on 2012 data and the ongoing protests this year highlight how much HK stands to lose if the rule of law or fair treatment of all is undermined,” McMahon added. “This is threatened by encroaching mainland Chinese influence in Hong Kong’s legal system and attempts to impose government control on judges and their decisions—potentially turning the rule of law into a political instrument. This is an attack on Hong Kong’s future prosperity and international standing.”
Countries in the top quartile of economic freedom had an average per capita GDP of US$39,899 in 2012, compared to US$6,253 for bottom quartile nations.
Moreover, the average income of the poorest 10 per cent in the most economically free countries in 2012, US$11,610, was almost double the overall average income in the least free countries. And life expectancy is 79.9 years in the top quartile compared to 63.2 years in the bottom quartile.
About the Economic Freedom Index
Economic Freedom of the World measures the degree to which the policies and institutions of countries support economic freedom. The 2014 report was prepared by James Gwartney, Florida State University; Robert A. Lawson, Southern Methodist University; and Joshua Hall, West Virginia University.
This year’s publication ranks 151 countries and Hong Kong. The report also updates data in earlier reports in instances where data has been revised.
For more information on the Economic Freedom Network, datasets, and previous Economic Freedom of the World reports, visit www.freetheworld.com. Also ‘Like’ the Economic Freedom Network on Facebook: www.facebook.com/EconomicFreedomNetwork.
The Fraser Institute produces the annual Economic Freedom of the World report in cooperation with the Economic Freedom Network, a group of independent research and educational institutes in nearly 90 nations and territories. It’s the world’s premier measurement of economic freedom, using 42 distinct variables to create an index, ranking countries based on economic freedom, which is measured in five areas: size of government, legal structure and security of property rights, access to sound money, freedom to trade internationally, and regulation of credit, labour and business. See the full report at www.freetheworld.com.
Friedrich Naumann Foundation for Freedom
International Political Dialogue – European Institutions and North America
Hans H. Stein, Director
Av. Cortenbergh 71
1000 – Brussels
T.: +32 2 2820930
For more information on the Economic Freedom Network, datasets, and previous Economic Freedom of the World reports, go to www.freetheworld.com.