Transcript Economic Freedom of the World: Annual Report 2004

Economic Freedom of the
World: 2004 Annual Report

Fraser Institute
Policy Briefing
 July 15

2004
1
THANK YOU FOR
COMING!

The key to changing policy in the world is
changing the climate of opinion about what
works and what does not work in
encouraging world development
 The key to changing the climate of opinion
is providing the widest possible audience
with good information about the causes of
development and under-development
2
Economic Freedom of the
World Project

Objective: find a way to measure economic
freedom and explore the connection
between it and other variables
 20 year project
 Led by Professor Milton Friedman, Rose
Friedman and Michael Walker
 Involved 100 of the world’s top scholars
3
What is The Economic
Freedom of the World Index?
 An
annual compilation of data representing factors
which make a country economically free
 Authors: James Gwartney and Robert Lawson
 A compendium of 38 government policies affecting
economic freedom based on objective data or
independent surveys
 A ranking of 123 countries representing 91% of the
world’s population according to the extent to which
they permit their citizens to be economically free
 Now a collaboration of Institutes in 62 different
countries
4
What is Economic Freedom
Individuals have economic freedom when
property they acquire without the use of force,
fraud, or theft is protected from physical invasions
by others and they are free to use, exchange, or
give their property as long as their actions do not
violate the identical rights of others. An index of
economic freedom should measure the extent to
which rightly acquired property is protected and
individuals are engaged in voluntary transactions.
James Gwartney et al. 1996
5
Components of The Economic
Freedom of the World Index

Size of government and taxation
 Private property and the rule of law
 Soundness of Money
 Trade regulation and tariffs
 Regulation of business, labour and capital
markets
 Based entirely on objective or third party
data from 123 countries
6
Talk about making a difference …
7
Member Institutes of Economic Freedom of the World
Instituto Libertad y Desarrollo, Chile
Network
African Research Center for Public Policy and Market The Fraser Institute, Canada
Instituto para la Libertad y el Análisis de
Políticas, Costa Rica
Process, Kenya
Free Market Centre, Serbia
Albanian Center for Economic Research (ACER),
Albania
The Free Market Foundation of Southern Liberales Institut, Germany
Africa, South Africa
Liberales Institut, Switzerland
Alternate Solutions Institute, Pakistan
Fundación DL, Colombia
Liberální Institut, Czech Republic
Association for Liberal Thinking, Turkey
Fundación Economía y Desarrollo, Inc.,
Dominican Republic
Lithuanian Free Market Institute,
Lithuania
Fundación Libertad, Argentina
Making Our Economy Right (MOER),
Bangladesh
Association pour la Liberté Economique et le Progrès
Social (ALEPS), France
Cato Institute, United States of America
Fundación Libertad, Panamá
Center for the Dissemination of Economic Knowledge
(CEDICE), Venezuela
Fundación Libertad, Democracia y
Desarrollo, Bolivia
Center for Entrepreneurship and Economic
Development (CEED), Montenegro
Hong Kong Centre for Economic
Research, Hong Kong
Center for Free Enterprise, Korea
Institute for Advanced Strategic and
Political Studies, Israel
Center for Politiske Studier, Denmark
The Center for Research and Communication,
Philippines
Centre for Civil Society, India
Centre for the New Europe, Belgium
Centro Einaudi, Italy
Centro de Investigación para el Desarrollo A.C.,
Mexico
Institute for Market Economics, Bulgaria
Institute of Business, Trinidad and
Tobago
The Nassau Institute, Bahamas
The New Zealand Business Roundtable,
New Zealand
Open Republic Institute, Ireland
The Pathfinder Foundation, Sri Lanka
Romania Think Tank, Romania
Scientific Research Mises Center, Belarus
Society for Disseminating Economic
Knowledge: "New Economic SchoolThe Institute of Economic Affairs, Ghana Georgia," Georgia
The Institute of Economic Affairs, United Szazadveg Policy Research Center,
Kingdom
Hungary
Institute of Economic Analysis, Russia
TIGRA®, Austria
Centro de Investigación y Estudios Legales (CITEL),
Peru
Institute of Economic Studies, Iceland
Timbro, Sweden
The Institute of Economics, Croatia
Centro de Investigaciones Económicas Nacionales,
Guatemala
Institute of Public Affairs, Australia
The Ukrainian Center for Independent
Political Research, Ukraine
Centrum im. Adama Smitha, Poland
Institute of Public Policy Analysis,
Nigeria
The Estonian Institute for Open Society Research,
Estonia
Instituto Ecuatoriano de Economía
Política, Ecuador
The F.A. Hayek Foundation, Slovak
D’Letzeburger Land, Luxembourg
The Institute for Development of Economics and Finance, Indonesia
Bureau d’Analyse d’Ingenierie 8et de
Instituto Liberal do Rio de Janeiro, Brazil Logiciels (BAILO), Ivory Coast
Sample of Press Coverage for
Fraser Institute’ Economic Freedom of the World 2003
Calgary Herald
Edmonton Journal
Globe and Mail
La Presse
National Post
Toronto Star
Ottawa Citizen
Ottawa Sun
Economist
Info Bae, Argentina
AFX-Asia
Asia Pulse (3 article)
ChannelnewsAsia
Bahamas Paper
Nassau Guardian
Nassau Tribune
Tribune, Bahamas
Barbados Advocate
People's Daily, China
South China Morning Post
Xinhua, China (3 articles)
La Republica, Costa Rica
(2 articles)
Portafolio, Colombia
Economia, Costa Rica
La Nacion, Costa Rica
La Republica, Costa Rica
La Nacion, Costa Rica
El Financiero, Ecuador
Baltic News, Europe
Deutsche Presse-Agentur
World Markets, Europe
Agence France Presse, France
(2 articles)
Focus, Germany
Frankfurter
Asia Times, Hong Kong
Factiva, Hong Kong
Hong Kong Imail
Inter Press Service News Agency,
Hong Kong
Hindu, India
Nationwide International News, India
Dong-a Ilbo, Korea
Hankook Ilbo, Korea
JoongAng Daily, Korea
Korea Times
Kukmin Daily, Korea
Kyunghyang Daily News, Korea
Maeil Business Newspaper,
Korea
Segye Times, Korea
Seoul Economic Daily
Yonhap News, Korea
La Sentinelle, Mauritius
L'Express, Mauritius
Business Story, New Zealand
Dominion Post, New Zealand (2 articles)
Evening Standard, New Zealand
National Business Review, New Zealand
(2 articles)
Nelson Mail, New Zealand
New Zealand Herald (3 articles)
News, New Zealand
Northern Advocate, New Zealand
Sunday Star Times, New Zealand
La Prensa, Panama
Panama America
Aaaii ii-ioaeiaio, Russia
Arehtctbo Muk, Russia
Hobocth Kutar, Russia
Danas, Serbia
Pregled, Serbia
Factiva, Taiwan
Central News Agency, Taiwan
London Times
Christian Science Monitor
9
Reforma
10
Introducing the 2004 Economic
Freedom of the World Index Results
11
Overall Economic Freedom Index
and the Top Ten
Hong Kong
Singapore
New Zealand
United Kingdom
United States
Switzerland
Average of Top Ten
Australia
Canada
Ireland
Luxembourg
0
2
4
6
8
10
Score (out of 10)
12
Source: The Fraser Institute.
The top ten and how they got there
0
20
Singapore
New Zealand
40
Switzerland
60
United Kingdom
United States
80
Australia
Canada
100
20
02
20
01
20
00
19
95
19
90
19
85
19
80
19
75
Ireland
19
70
Percentile Ranks
Hong Kong
Luxembourg
13
Source: The Fraser Institute.
Countries having significant
improvement since 1970
Percentile Ranks
0
20
40
60
80
100
1970 1975 1980 1985 1990 1995 2000 2001 2002
Kuwait
Chile
United Kingdom
El Salvador
Hungary
Estonia
Uganda
Sweden
Trinidad & Tob.
Jamaica
14
Source: The Fraser Institute.
Countries having significant
deterioration since 1970
Percentile Ranks
0
20
40
60
80
100
1970 1975 1980 1985 1990 1995 2000 2001 2002
Sierra Leone
Barbados
Cameroon
Nepal
Bahamas
Niger
Paraguay
Mali
Pap. New Guinea
Venezuela
15
Source: The Fraser Institute.
Overall Economic Freedom Index
and the Bottom Ten
Russia
Congo, Rep. Of
Burundi
Guinea-Bissau
Venezuela
Algeria
Central Afr. Rep.
Congo, Dem. R.
Zimbabwe
Myanmar
0
2
4
6
Score (out of 10)
Source: The Fraser Institute.
8
10
16
Economic Freedom Over Time
Economic Freedom Scores
10
8
6
6.2
5.1
5.2
1980
1985
6.5
6.5
2000
2002
5.6
4
2
0
1990
1995
17
Source: The Fraser Institute.
Economic Freedom in Canada
18
Size of Government and the Top Ten
Hong Kong
Singapore
United States
Switzerland
Average of Top Ten
United Kingdom
New Zealand
Canada
Australia
Ireland
Luxembourg
0
2
4
6
8
10
Score (out of 10)
19
Source: The Fraser Institute.
Size of Government and the Top
Ten
Percentile Ranks
0
Australia
20
Canada
Hong Kong
40
Ireland
Luxembourg
60
New Zealand
Singapore
80
Switzerland
United Kingdom
United States
100
1970 1975 1980 1985 1990 1995 2000 2001 2002
Average of Top Ten
20
Source: The Fraser Institute.
Legal System and Property Rights
and the Top Ten
Australia
United Kingdom
New Zealand
Singapore
Switzerland
Average of Top Ten
Luxembourg
Canada
United States
Ireland
Hong Kong
0
2
4
6
Score (out of 10)
Source: The Fraser Institute.
8
10
21
Source: The Fraser Institute.
Gre
ec
Spa e
Por in
tuga
l
It al
Fra y
nc
Jap e
an
Lux Belgiu
emb m
o
Nor urg
w
Irel ay
a
Swe nd
den
I
c
New el an
Zea d
Ger land
m
Uni
ted any
Sta
Can tes
Swi
ada
t
z
e
Uni
r
ted land
Ki ..
Aus .
Fin tri a
Aus l and
Den tralia
Net mark
her
land
s
Score (out of 10)
Legal System and Property Rights, 2000
(High Income OECD Countries)
10
8th
8
6
4
2
0
22
Source: The Fraser Institute.
Gre
ec
Spa e
Jap in
Fra an
nc e
I
Por t aly
tu
Belg gal
iu
Uni Ir el a m
ted
Statnd
Can e s
ad
Lux Nor wa a
emb y
our
g
A
u
Swi
s tri
a
tze r
l
a
Ger nd
m
Swe any
de
New Ic el a n
n
Uni
ted Ze alan d
K
Net i ngdo d
her
landm
Aus
s
t
r
a
Den lia
m
Finl ark
and
Score (out of 10)
Legal System and Property Rights, 2002
(High Income OECD Countries)
10
14th
8
6
4
2
0
23
Legal System and Property Rights
and the Top Ten
Percentile Ranks
0
Australia
20
Canada
Hong Kong
40
Ireland
Luxembourg
60
New Zealand
Singapore
80
Switzerland
United Kingdom
United States
100
1970 1975 1980 1985 1990 1995 2000 2001 2002
Average of Top Ten
24
Source: The Fraser Institute.
Source: The Fraser Institute.
It a
Fra ly
n
Gre ce
Por ece
tu
Lux
emb gal
o
Belg urg
ium
Spa
in
Uni Japa
ted
Stat n
Nor es
w
Icel ay
a
Irel nd
a
Swe nd
Swi
tzer den
land
Uni Austr
ted
i
Ki .. a
.
New Canad
Zea a
Den land
m
Ger ark
m
Aus any
Net trali
her
landa
Fin s
l and
Score (out of 10)
Judiciary Independence, 2000
(High Income OECD Countries)
10
7th
8
6
4
2
0
25
Source: The Fraser Institute.
Spa
Fra in
nce
It a
Gre ly
ec
Jap e
Belg an
iu
Irel m
a
Aus nd
tri a
C
Lux anad
emb a
o
Nor urg
Por way
Uni
t
ted ugal
Swi State
tzer s
land
S
Uni wede
ted
Ki .. n
Ger .
man
y
I
Net cel and
New herlan
Zea ds
Aus land
Den tralia
ma
Fin rk
l and
Score (out of 10)
Judiciary Independence, 2002
(High Income OECD Countries)
10
8
15th
6
4
2
0
26
Judiciary Independence and the
Top Ten
Percentile Ranks
0
Australia
20
Canada
Hong Kong
40
Ireland
Luxembourg
60
New Zealand
Singapore
80
Switzerland
United Kingdom
United States
100
1995
2000
2001
2002
Average of Top Ten
27
Source: The Fraser Institute.
Source: The Fraser Institute.
Gre
ec e
Por It aly
tuga
Jap l
Fra an
nc
Spa e
i
Lux Belgiu n
emb m
our
S
w
e de g
Swi
tze r n
l
Nor and
Finlway
a
Aus nd
tri
Uni
ted Ic el an a
Uni Ki ngd d
o
ted
Stat m
Can e s
Ger ada
man
New Ir el a y
Ze a nd
Den land
Net mar
her
k
l
a
n
Aus ds
tral
ia
Score (out of 10)
Impartial Courts, 2000
(High Income OECD Countries)
10
7th
8
6
4
2
0
28
Source: The Fraser Institute.
Uni
te
Net d State
her
lands
Can s
Por ada
tu
Ic el gal
and
I
Nor t aly
w
Gre ay
Ir el ec e
Ger and
Swi man
y
tze r
land
New Finl a
Ze a nd
la
Fra nd
nc e
Lux Spa
emb in
o
Aus urg
tri
Uni
ted Swe de a
Ki n
n
g
d
Aus om
Den tralia
mar
Jap k
Belg an
ium
Score (out of 10)
Impartial Courts, 2002
(High Income OECD Countries)
10
8
6
21st
4
2
0
29
Impartial Courts and the Top Ten
Percentile Ranks
0
Australia
20
Canada
Hong Kong
40
Ireland
Luxembourg
60
New Zealand
Singapore
80
Switzerland
United Kingdom
United States
100
1995
2000
2001
2002
Average of Top Ten
30
Source: The Fraser Institute.
Sound Money and the Top Ten
United States
Luxembourg
Switzerland
Singapore
Ireland
Average of Top
United Kingdom
Canada
Australia
New Zealand
Hong Kong
0
2
4
6
Score (out of 10)
Source: The Fraser Institute.
8
10
31
Sound Money and the Top Ten
Percentile Ranks
0
Australia
20
Canada
Hong Kong
40
Ireland
Luxembourg
60
New Zealand
Singapore
80
Switzerland
United Kingdom
United States
100
1970 1975 1980 1985 1990 1995 2000 2001 2002
Average of Top Ten
32
Source: The Fraser Institute.
Freedom to Trade Internationally
and the Top Ten
Hong Kong
Singapore
Ireland
Luxembourg
Average of Top Ten
New Zealand
Switzerland
United Kingdom
Canada
United States
Australia
0
2
4
6
8
10
Score (out of 10)
33
Source: The Fraser Institute.
Freedom to Trade Internationally
and the Top Ten
Percentile Ranks
0
Australia
20
Canada
Hong Kong
40
Ireland
Luxembourg
60
New Zealand
Singapore
80
Switzerland
United Kingdom
United States
100
1970 1975 1980 1985 1990 1995 2000 2001 2002
Average of Top Ten
34
Source: The Fraser Institute.
Regulations and the Top Ten
Hong Kong
United States
New Zealand
Australia
Average of Top Ten
Luxembourg
United Kingdom
Switzerland
Canada
Singapore
Ireland
0
2
4
6
8
10
Score (out of 10)
35
Source: The Fraser Institute.
Regulations and the Top Ten
Percentile Ranks
0
Australia
20
Canada
Hong Kong
40
Ireland
Luxembourg
60
New Zealand
Singapore
80
Switzerland
United Kingdom
United States
100
1970 1975 1980 1985 1990 1995 2000 2001 2002
Average of Top Ten
36
Source: The Fraser Institute.
Credit Market Regulations and
the Top Ten
New Zealand
United States
Luxembourg
United Kingdom
Canada
Australia
Hong Kong
Average of Top Ten
Switzerland
Ireland
Singapore
0
2
4
6
Score (out of 10)
Source: The Fraser Institute.
8
10
37
Credit Market Regulations and the
Top Ten
Percentile Ranks
0
Australia
20
Canada
Hong Kong
40
Ireland
Luxembourg
60
New Zealand
Singapore
80
Switzerland
United Kingdom
United States
100
1970 1975 1980 1985 1990 1995 2000 2001 2002
Average of Top Ten
38
Source: The Fraser Institute.
Labor Market Regulations and the
Top Ten
Hong Kong
United States
United Kingdom
Canada
Average of Top Ten
Luxembourg
Australia
New Zealand
Switzerland
Singapore
Ireland
0
2
4
6
8
10
Score (out of 10)
39
Source: The Fraser Institute.
Labor Market Regulations and the
Top Ten
Percentile Ranks
0
Australia
20
Canada
Hong Kong
40
Ireland
New Zealand
60
Singapore
Switzerland
80
United Kingdom
United States
100
1970 1975 1980 1985 1990 1995 2000 2001 2002
Average of Top Ten
40
Source: The Fraser Institute.
Business Regulations and the Top
Ten
Hong Kong
Singapore
New Zealand
Switzerland
Australia
Average of Top Ten
United States
Luxembourg
Canada
United Kingdom
Ireland
0
2
4
6
Score (out of 10)
Source: The Fraser Institute.
8
10
41
Source: The Fraser Institute.
ec e
I
Por t aly
tuga
l
Spa
i
Jap n
Aus an
tra
Aus lia
tr
Fra i a
Belg nc e
Den ium
m
Nor ark
Ger way
man
Ir el y
Swi
a
tze r nd
land
C
an
Uni
ted ada
K
Uni
ted i ...
Net State s
her
lan
Swe ds
de n
I
c
el a
New
Ze a nd
la
Finl nd
and
Gre
Score (out of 10)
Business Regulations, 2000
(High Income OECD Countries)
10
8th
8
6
4
2
0
42
Source: The Fraser Institute.
It a
Gre ly
Por ec e
tu
Belg gal
iu
Fra m
nc
Jap e
an
Spa
in
I
r
e
Net
l and
h
e
r
Uni
ted lands
K
Ger i ...
m
Nor any
Den way
mar
Aus k
tri a
C
a
Lux
nad
e
m
bou a
Uni
r
ted
Stat g
e
Aus
tral s
ia
S
Swi we de n
New tze rlan
d
Ze a
land
Finl
a
Ic el nd
and
Score (out of 10)
Business Regulations, 2002
(High Income OECD Countries)
10
8
9th
6
4
2
0
43
Business Regulations and the Top
Ten
Percentile Ranks
0
Australia
20
Canada
Hong Kong
40
Ireland
New Zealand
60
Singapore
Switzerland
80
United Kingdom
United States
100
1995
2000
2001
2002
Average of Top Ten
44
Source: The Fraser Institute.
Source: The Fraser Institute.
Gr
Por e ec e
tuga
It al l
Spa y
Fra in
Ger nc e
man
y
I
Swi r el an
tze r d
la
Aus nd
Belg tri a
iu
Jap m
a
Uni Nor wan
te
y
Net d State
Uni
h
ted er lands
Ki n
gdo s
m
Aus
tral
Can ia
ada
S
w
New
e
Ze a de n
Den land
mar
Finl k
a
Ic el nd
and
Score (out of 10)
Irregular Payments, 2000
(High Income OECD Countries)
10
6th
8
6
4
2
0
45
0
Source: The Fraser Institute.
Gr e
ece
It al
y
Jap
an
Ire l
an
Belg d
iu
Por m
tuga
Can l
ada
Spa
in
F
r
anc
Uni
e
ted
Stat
e
Nor s
w
L ux
emb ay
our
Aus g
tri a
Ne
Uni therl an
ted
K in ds
gd
Ge r om
man
Swi
tzer y
l
Aus and
tral
Swe ia
de n
Fin
l an
New
Zea d
l an
Ice l d
a
Den nd
mar
k
Score (out of 10)
Irregular Payments, 2002
(High Income OECD Countries)
10
17th
8
6
4
2
46
Canada’s Score 2000 vs 2002
Selected Indicators
10
Score (out of 10)
8
2000
2002
6
4
2
0
Judiciary
Independence
Impartial
Courts
Legal System
& Property
Rights
Source: The Fraser Institute.
Irregular
Payments
Business
Regulations
47
Why is Economic Freedom
Important?

Economic rights are fundamental rights in
the sense that without them there can be no
political freedom or civil freedoms
 They are a prerequisite for growth and
development
 They are a prerequisite for broader human
development
48
The impact on economic
growth and development
49
Income (per person) of the
Bottom Ten
Russia
Algeria
Venezuela
Zimbabwe
Togo
Central Afr. Rep.
Congo, Rep. Of
Guinea-Bissau
Congo, Dem. R.
Burundi
0
10,000
20,000
30,000
40,000
50,000
60,000
GDP per Capita, 2002 (ppp)
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
50
(Online).
Income (per person) of the Top Ten
Luxembourg
Ireland
United States
Switzerland
Canada
Australia
Hong Kong
United Kingdom
Singapore
New Zealand
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
GDP per Capita, 2002 $US (ppp)
Sources: The Fraser Institute; The World Bank, World Development Indicators
2004
51
(Online).
Per Capita Income and Economic
Freedom Quintile
GDP Per Capita, ppp
US$, 2002
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
Bottom
Quintile
Fourth
Quintile
Third
Quintile
Second
Quintile
Top Quintile
Least Free …….. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
52
(Online).
Growth in Real GDP Per Capita
and Economic Freedom Quintile
GDP Per Capita % Growth,
1993-2002
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
Bottom
Quintile
Fourth
Quintile
Third
Quintile
Second
Quintile
Top Quintile
Least Free ……………..….. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
53
(Online).
New Research:
Economic Freedom,
Investment, and Growth
54
Regressions: Economic Freedom and the
Productivity of Investment
Change in economic growth (1980-2000) per unit difference in Private I/GDP
Percentage Point Change
Change in economic growth (1980-2000) per unit difference in Private I/GDP (LDCs only)
0.5
0.4
0.33
0.27
0.3
0.19
0.35
0.27
0.21
0.2
0.1
0.0
EFW < 5
Source: The Fraser Institute.
5 < EFW < 7
EFW > 7
55
Regressions: Changes in Economic Freedom and
Economic Growth
Impact of a one-unit difference in the 1980 EFW rating on growth of GDP per capita, 1980-2000.
Impact of a one-unit change in EFW in the 1980s on growth of GDP per capita, 1980-2000.
Impact of a one-unit change in EFW in the 1990s on growth of GDP per capita, 1980-2000.
Percentage Points
2.2
1.90
1.52
1.7
1.28
1.2
1.00
0.82
0.58
0.7
0.2
Direct Impact
Total Impact
56
Source: The Fraser Institute.
Economic Freedom and Investment
Per Worker, 1980-2000
Investment per worker, 1980-2000 (US$)
Foreign direct investment per worker, 1980-2000 (US$)
$12,000
$10,871
US Dollars
$10,000
$8,000
$6,000
$3,319
$4,000
$2,000
$845
$68
$3,117
$444
$0
EFW < 5
5 < EFW < 7
EFW > 7
57
Source: The Fraser Institute.
Economic Freedom and Total and Private
Investment as a Share of GDP
Private investment, 1980-2000 (% of GDP)
Total investment, 1980-2000 (% of GDP)
25
21.3
18.6
20
Percent
22.8
18.0
14.2
15
9.6
10
5
0
EFW < 5
5 < EFW < 7
EFW > 7
58
Source: The Fraser Institute.
Economic Freedom and Growth in Per
Capita GDP, 1980-2000
Average Annual Growth Rate of Per Capita GDP ($US 1995)
3.00
Percent
2.50
2.00
1.50
1.00
0.50
0.00
EFW < 5
5 < EFW < 7
EFW > 7
59
Source: The Fraser Institute.
Economic Freedom,the Poor, and
Inequality
60
Human Poverty Index, 2001, and
Economic Freedom Quintile
Human Poverty Index
40
35
30
25
20
15
10
5
0
Bottom
Quintile
Fourth
Quintile
Third
Quintile
Second
Quintile
Top Quintile
Least Free …………..…. Most Free
Sources: The Fraser Institute; United Nations Development Programmme, Human
Development Indicators 2003 (Online),
http://hdr.undp.org/reports/global/2003/indicator/index.html
61
(accessed on June 16, 2004).
Income Inequality, 1998-2002
Percent of income accruing to the
Poorest 20%
2nd 20%
3rd 20%
4th 20%
Richest 20%
60
Percentage
50
40
30
20
10
0
Bottom
Quintile
Fourth
Quintile
Third
Quintile
Second
Quintile
Top
Quintile
Least Free …….. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
62
(Online).
Income Share Held by
Lowest 10%, 1997-2002
Income Share of the Poorest
10% and Economic Freedom
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Bottom
Quintile
Fourth
Quintile
Third
Quintile
Second
Quintile
Top
Quintile
Least Free …….. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
(Online).
63
Per Capita Income of Poorest 10%
and Economic Freedom
Income of the lowest 10%, 1997-2002
Income share held by lowest 10%, 1997-2002
$8,000
3.0
$7,000
2.5
$6,000
2.0
$5,000
$4,000
1.5
$3,000
1.0
$2,000
0.5
$1,000
$0
0.0
Bottom Quintile
Fourth Quintile
Third Quintile
Second Quintile
Top Quintile
Least Free …….. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
64
(Online).
Economic Freedom,
Other Freedoms and
Democracy
65
Economic Freedom Versus Corruption
10 =highly corrupt and 0 =highly clean
Corruption Rating
(out of 10)
10
8
6
4
2
0
Bottom
Quintile
Fourth
Quintile
Third
Quintile
Second
Quintile
Top Quintile
Least Free ………….. Most Free
Sources: The Fraser Institute; Transparency International, Corruption
Perceptions Index 2003 (Online).
66
Political Stability and Economic
Freedom Quintile
10
8
6
4
2
0
Bottom 20% 2nd Quintile 3rd Quintile
4th Quintile
Least Free ………..… Most Free
Top 20%
67
Economic Freedom and Political Rights
ten representing the highest degree of political rights
and zero the lowest
Political Rights
(out of 10)
10
8
6
4
2
0
Bottom
Quintile
Fourth
Quintile
Third
Quintile
Second
Quintile
Top
Quintile
Least Free …… Most Free
Sources: The Fraser Institute; Freedom House, Freedom in the World Country 68
Ratings, 1973-2003 (Online).
Economic Freedom and Civil Liberties
ten representing the highest degree of civil liberties
and zero the lowest
Civil Liberties
(out of 10)
10
8
6
4
2
0
Bottom
Quintile
Fourth
Quintile
Third
Quintile
Second
Quintile
Top Quintile
Least Free …… Most Free
Sources: The Fraser Institute; Freedom House, Freedom in the World Country
Ratings, 1973 to 2003 (Online).
69
The impact of Economic Freedom on
the UN’s Human Development Index
and other indicators of well-being
70
United Nations
Human Development
Index, 2001
Human Development Index, 2001,
and Economic Freedom Quintiles
1.0
0.8
0.6
0.4
0.2
0.0
Bottom
Quintile
Fourth
Quintile
Third
Quintile
Second
Quintile
Top Quintile
Least Free ……………. Most Free
Sources: The Fraser Institute; United Nations Development Programmme, Human
Development Indicators 2003 (Online), available at
http://www.undp.org/hdr2003/indicator/index_indicators.html
71
(accessed on June 15, 2004).
Life Expectancy at Birth and
Economic Freedom Quintiles
80
Years
60
40
20
0
Bottom
Quintile
Fourth
Quintile
Third
Quintile
Second
Quintile
Top Quintile
Least Free ……………. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
72
(Online).
Per 1,000 live births, 2002
Infant Mortality and Economic
Freedom Quintile
100
80
60
40
20
0
Bottom
Quintile
Fourth
Quintile
Third
Quintile
Second
Quintile
Top
Quintile
Least Free ………..…. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
73
(Online).
Probability of dying between
the ages 15 and 60
Adult Mortality (2000) and
Economic Freedom Quintile
0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00
Bottom
Quintile
Fourth
Quintile
Third
Quintile
Second
Quintile
Top
Quintile
Least Free ………..…. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
74
(Online).
Economic Freedom and Labor force,
children 10-14 (% of age group)
Percentage of children
10-14 who are in the
labour force
25
20
15
10
5
0
Bottom
Quintile
Fourth
Quintile
Third
Quintile
Second
Quintile
Top
Quintile
Least Free ……………. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
75
(Online).
Access to Essential Drugs, 1999,
and Economic Freedom Quintiles
% of population with
access
100
80
60
40
20
0
Bottom
Quintile
Fourth
Quintile
Third
Quintile
Second
Quintile
Top
Quintile
Least Free …………..Most Free
Sources: The Fraser Institute; United Nations Development Programmme, Human
Development Indicators 2002 (Online), available at
76
http://hdr.undp.org/reports/global/2002/en/indicator/indicator.cfm?File=index.html
% of Population Using Improved
Water Sources, 2000
100
Percentage
80
60
40
20
0
Bottom
Quintile
Fourth
Quintile
Third
Quintile
Second
Quintile
Top
Quintile
Least Free …………….. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
77
(Online).
Conclusions
Economic Freedom spurs

Increased prosperity for all
 Poverty reduction
 Other freedoms
 Reduces Probability of War
 Quality of life improvements
All this can be seen in today’s data
and lessons from history
78
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www.fraserinstitute.ca
79