Hong Kong and Singapore retain the top two positions with a score of 8.94 and 8.65 out of 10, respectively in the 2020 edition of the Economic Freedom of the World report. The rest of this year’s top scores are for New Zealand, Switzerland, Australia, United States, Mauritius, Georgia, Canada, and Ireland.
The United States slipped to 6th place in 2018 after having ranked 5th in the previous two years. The rankings of other large economies in this year’s index are Japan (20th), Germany (21st), Italy (51st), France (58th), Mexico (68th), Russia (89th), India (105th), Brazil (105th), and China (124th). The ten lowest‐rated countries are: the Central African Republic, Democratic Republic of Congo, Zimbabwe, Republic of Congo, Algeria, Iran, Angola, Libya, Sudan, and, lastly, Venezuela.
Nations in the top quartile of economic freedom had an average per capita GDP of US$44,198 in 2018, compared to $5,754 for bottom quartile nations. Moreover, the average income of the poorest 10% in the most economically free nations is more than twice the average per capita income in the least free nations. Life expectancy is 80.3 years in the top quartile compared to 65.6 years in the bottom quartile.
Note: In my view, any country that has a central bank should not be ranked higher than 5 out of 10. All such countries are vulnerable to the business cycle and critics can point to the high ranking as an example of how "free countries" can not stop the business cycle when it is the central planning nature of central banks and not freedom that causes the business cycle.
That said, the guide does provide a rough guide as to which countries are most oppressive when it comes to the economy. Another reason most of these countries, especially the United States and Australia should be ranked lower (one hopes in the 2021 edition) is because of the oppressive COVID-19 business lockdowns.
The report is co-published by the Cato Institute, the Fraser Institute in Canada and more than 70 think tanks around the world.
Walter Block was instrumental in creating the report.
-RW
Excellent point on central banks acting as a hard limit on economic freedom (how economically free are you when your entire monetary system is constantly being debased and manipulated?). Any countries or territories come to mind that effectively don't have a central bank though? Or I guess who is the least worst? Switzerland was for awhile but they seem to have enacted a policy of actively keeping their currency from strengthening too much...
ReplyDeleteA similar argument could be made for any country with a legislature. There is no need for legislation only a competitive process of arbitration.
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