Transcript EFW2010Presentation

Economic Freedom of the
World: 2010 Annual Report
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 underdevelopment
Economic Freedom of the
World Project

Objective: find a way to measure economic
freedom and explore the connection
between it and other variables
 30 year project
 Led by the late Milton Friedman and Rose
Friedman, and Michael Walker
 Involved 60 of the world’s top scholars
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, Robert Lawson, and
Joshua Hall
 A compendium of 42 government policies affecting
economic freedom based on objective data or
independent surveys
 A ranking of 141 countries representing 95% 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 80 nations and
terrritories
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
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, third party data
and independent surveys for 141 countries
Talk about making a difference …
Member Institutes of Economic Freedom of
the World Network
Albanian Center for Economic Research
(ACER), Albania
Fundación Libertad, Argentina
Institute of Public Affairs, Australia
TIGRA®, Austria
Center for Economic and Political
Research,Azerbaijan
The Nassau Institute, Bahamas
Making Our Economy Right (MOER),
Bangladesh
Scientific Research Mises Center, Belarus
Centre for the New Europe, Belgium
Fundacion Libertad y Democracia (FULIDE),
Bolivia
Instituto Liberal do Rio de Janeiro, Brazil
Institute for Market Economics, Bulgaria
Le Centre des Affaires Humaines
(CEDAH),Burkina Faso
The Cambodia Institute of Development
Study, Cambodia
Instituto Libertad y Desarrollo, Chile
Instituto Libertad y Progreso (ILP), Colombia
Instituto para la Libertad y el Análisis de
Políticas, Costa Rica
The Institute of Economics, Croatia
Liberální Institut, Czech Republic
Center for Politiske Studier (CEPOS),
Denmark
Fundación Economía y Desarrollo Inc,
Dominican Republic
Instituto Ecuatoriano de Economía
Política,Ecuador
International University Audentes, Estonia
Association pour la Liberté Economique et le
Progrès Social (ALEPS), France
Society for Disseminating Economic
Knowledge:, New Economic School –
Georgia, Georgia
Liberales Institut, Germany
The Institute of Economic Affairs, Ghana
Centro de Investigaciones Económicas Nacionales,
Guatemala
Institut de Recherche pour la Liberte Economique et
la Prosperite (IRLEP), Haiti
Hong Kong Centre for Economic Research, Hong
Kong
Szazadveg Foundation, Hungary
Centre for Social and Economic Research (RSE),
Iceland
Centre for Civil Society, India
The Institute for Development of Economics and
Finance, Indonesia
Open Republic Institute, Ireland
Jerusalem Institute for Market Studies, Israel
Centro Einaudi, Italy
Bureau d'Analyse d'Ingenierie et de Logiciels
(BAILO), Ivory Coast
Young Entrepreneurs Association, Jordan
African Research Center for Public Policy and Market
Process, Kenya
Center for Free Enterprise, Korea
Economic Policy Institute-Bishkek Consensus,
Kyrgyz Republic
Lithuanian Free Market Institute, Lithuania
D'Letzeburger Land, Luxembourg
Centro de Investigación para el Desarrollo A.C.,
Mexico
Open Society Forum, Mongolia
The Center for Entrepreneurship and Economic
Development, Montenegro
The Prosperity Foundation, Nepal
The New Zealand Business Roundtable, New
Zealand
Initiative for Public Policy Analysis, Nigeria
Center for Business and Society Incorporated (Civita),
Norway
International Research Foundation (IRF), Oman
Alternate Solutions Institute, Pakistan
Pal-Think for Strategic Studies, Palestine
Fundación Libertad, Panama
Centro de Investigación y Estudios Legales (CITEL),
Peru
The Center for Research and Communication,
Philippines
Centrum im. Adama Smitha, Poland
Causa Liberal, Portugal
Romania Think Tank, Romania
Institute of Economic Analysis, Russia
Free Market Center (FMC), Serbia
The F.A. Hayek Foundation, Slovak Republic
The Free Market Foundation of Southern Africa,
South Africa
Pathfinder Foundation, Sri Lanka
Timbro, Sweden
Liberales Institut, Switzerland
Arthur Lok Jack Graduate School of Business, The
University of the West Indies, Trinidad, W.I.
Association for Liberal Thinking, Turkey
The Ukrainian Center for Independent Political
Research, Ukraine
The Institute of Economic Affairs (IEA), United
Kingdom
CATO Institute, USA
The Centre for the Dissemination of Economic
Knowledge (CEDICE), Venezuela
Research Center for Entrepreneurship Development,
Vietnam
Zambia Institute for Public Policy Analysis (ZIPPA),
Zambia
1) Sample of Press Coverage for
Fraser Institute’ Economic Freedom of the World 2009
A Traves De Venezuela
About.com:Markets
africaFM
African Executive
Alerta Venezuela
Alibaba.com News
AlphaTrade Finance
AlWatan Daily
AOL Money & Finance
Bahamas Weekly
Balkaninsight.com
Baltic Business Daily
Better Trends Financial
Live
Brisbane Times
Business Day
Business Mirror
Business Times
Business World Online
BusinessWorld
Cabalamuse
Catamacra es noticia
CBC-r
cdnews.com.tw
China Business
China Weekly News
Citizen Economists
CNBC
CNBC European Business
Columbia Star
CPI Financial
Diario el Financiero
Economia y Negocios Online
Economics Roundtable
Economist
El Espectador Uruguay
El Nacional
El Paso Times
Elsigloweb.com
eMediaWorld.com
Entorno Inteligente
Entorno Inteligente.com
Epochtimes.com (Australia)
Fairchild Radio
Finanz und Wirtschaft
Foreign Policy
Frenos & Contrapesos
Gazeta.pl Gospaoarka
GCPNews.com
gigapedia.com
Global Times
Guardian
Guía Venezuela
Gulf Daily News
Haaretz
Herald Media
Hong Kong Economic Journal
Hong Kong Trader
Hospodářské Noviny
Illinois Daily Herald
Individual.com
Institutional Investor
Instituto Ecuatoriano de Econom
Politica
Invertia
Invertia Peru
Invertia Venezuela
investujeme
IStock Analyst
IWF Inkwell
Jakarta Post
Jerusalem Post
Khaleej Times Online
Knowledge Problem
Korea Times
La Manana Córdoba
2) Sample of Press Coverage for
Fraser Institute’ Economic Freedom of the World 2009
L'agefi
latercera.com
Lepetitjournal.com
Libertad y Desarrollo
L'Orient le Jour
Macau Business
Mail & Guardian
Market Wire
Mediafax News Brief Service
Bucharest
Middle East Company News
Minuto59
MNNews & Mina
Montenegrin News
Money Web
Moneyworks.ae
MSN Money
Mumbai Mirror
Národná Obroda
National Business Review
Nepal News
NewsRoomAmerica.com
Newstin.ae
Noticia Al Dia
Novinite
Observer (Oman)
Oman Daily
Oman Tribune
One's Observations
Open Democracy
oPeniazoch
Orbitando
Plus News Pakistan
Political Calculations
Portalnet.ca
Public Choice
qtnews.net
Reason: Hit & Run
Report on Business Magazine
Rilindja Demokratrika
RosarioNet
Sake 24
SEEbiz.eu (BIH)
Sing Tao (Hong Kong)
sinomontreal.ca
SITA Slovenska Tlacova Agentura
SITA Slovenska Tlacova Agentura
(English)
Sofia Echo
South Asian Journal
South China Morning Post
Spero News
Sports Network
StreetInsider.com
Sydney Morning Herald
SYS-CON India
Taiwan News
TalCualDigital.com
The Standard (HK)
Times of Oman
Tlačová Agentúra Slovenskej Repu
Trade Arabia
Tribune
Tripoli Post
Tu Noticiero Digital.com
VeraSage Institute
Voice Online
VoxEU.org
WA Today
WABC-TV Channel 7
Whited Sepulche
Worcester Telegram & Gazette
World Journal
www.calcalist.co.il
www.ynet.co.il
Xinhua Online
Xorte
YeniCag
Zawya
ZhongGuo.ca
Sub-national and Regional Indices
Economic Freedom of the Arab World
Economic Freedom of Latin America
Economic Freedom of Francophonie
Marketization Index of Chinese Provinces
Economic Freedom Index of Indian States
Economic Freedom Index of
Argentinean Provinces
Economic Freedom of North America
Introducing the 2009 Economic
Freedom of the World Index Results
Overall Economic Freedom Index
and the Top 10
Hong Kong
Singapore
New Zealand
Switzerland
Chile
United States
Canada
Australia
Mauritius
United Kingdom
0
2
4
6
Score (out of 10)
Source: The Fraser Institute.
8
10
Overall Economic Freedom
Index and the Bottom Ten
Algeria
Congo, Dem. R.
Burundi
Guinea-Bissau
Central Afr. Rep.
Congo, Rep. Of
Venezuela
Angola
Myanmar
Zimbabwe
0
2
4
6
Score (out of 10)
Source: The Fraser Institute.
8
10
Economic Freedom Over Time
8
0
6.6
0
6.6
0
6.6
7
6.6
4
6.7
3
6.7
9
6.6
8
6.5
5
6.2
7
5.8
6
5.5
3
5.5
0
5.5
6
0
6.1
Economic Freedom Score
10
4
2
0
1970 1975 1980 1985 1990 1995 2000 2005 2006 2007 2008 2005 2006 2007
Source: The Fraser Institute.
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
The impact on prosperity
and development
Income (per person) of the
Bottom Ten
NA
Myanmar
Zimbabwe
Congo, Dem. R.
Burundi
Guinea-Bissau
Central Afr. Rep.
Congo, Rep. Of
Angola
Algeria
Venezuela
0
10,000
20,000
30,000
40,000
GDP per Capita, 2007 (ppp)
Sources: The Fraser Institute; The World Bank, World Development Indicators,
2010.
50,000
Income (per person) of the Top 10
Mauritius
Chile
New Zealand
United Kingdom
Australia
Canada
Switzerland
Hong Kong
United States
Singapore
$0
$10,000
$20,000
$30,000
$40,000
$50,000
GDP per Capita, 2007 (ppp)
Sources: The Fraser Institute; The World Bank, World Development Indicators,
2010.
Per Capita Income and Economic
Freedom Quartile
GDP Per Capita
(ppp), 2007
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
Most Free
Quartile
2nd Quartile
3rd Quartile
Least Free
Quartile
Most Free ……………. Least Free
Sources: The Fraser Institute; The World Bank, World Development Indicators,
2010.
GDP Per Capita % Growth,
1990-2007
Growth in Developing Nations Per
Capita and Economic Freedom Quartile
300.0%
250.0%
200.0%
150.0%
100.0%
50.0%
0.0%
Most Free
Quartile
2nd Quartile
3rd Quartile
Least Free
Quartile
Most Free ……………. Least Free
Sources: The Fraser Institute; The World Bank, World Development Indicators,
2010.
Foreign direct investment,
net inflows (% of GDP),
1990-2007
Foreign Direct Investment and
Economic Freedom Quartile
16.1%
12.9%
9.7%
6.4%
3.2%
0.0%
Most Free
Quartile
2nd Quartile
3rd Quartile
Least Free
Quartile
Most Free ……………. Least Free
Sources: The Fraser Institute; The World Bank, World Development Indicators,
2010.
Economic Freedom, the Poor, and
Inequality
Income Share of the Poorest 10% and
Income Share Held by
Lowest 10%, 1990-2007
Economic Freedom
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
Most Free
Quartile
2nd
Quartile
3rd
Quartile
Least Free
Quartile
Most Free ……………. Least Free
Sources: The Fraser Institute; The World Bank, World Development Indicators,
2010.
Per Capita Income of Poorest 10%
and Economic Freedom
Income share held by lowest 10%, 1990-2008
Average income earned by lowest 10%, 2008
$9,000
$8,000
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
Most Free Quartile
2nd Quartile
3rd Quartile
Least Free Quartile
Most Free ……………. Least Free
Sources: The Fraser Institute; The World Bank, World Development Indicators,
2010.
Economic Freedom, Governance,
and Democracy
Economic Freedom and Civil/Political Rights
8.0
Political Rights
(out of 7)
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Most Free
Quartile
2nd Quartile
3rd Quartile
Least Free
Quartile
Most Free ……………. Least Free
Sources: The Fraser Institute; Freedom House, Freedom in the World Country Ratings,
2008, available at http://www.freedomhouse.org/.
Economic Freedom and Corruption
High scores indicate low corruption
Corruption Rating
(out of 10)
10
8
6
4
2
0
Most Free
Quartile
2nd Quartile
3rd Quartile
Least Free
Quartile
Most Free ……………. Least Free
Sources: The Fraser Institute; Transparency International, Corruption Perceptions Index,
2008/2009, available at http://www.transparency.org.
The impact of Economic Freedom on
other indicators of well-being
Civil Liberties
(out of 10)
Economic Freedom and
Life Satisfaction
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Most Free
Quartile
2nd Quartile
3rd Quartile
Least Free
Quartile
Most Free ……………. Least Free
Sources: The Fraser Institute; Freedom House, he (un)Happy Planet Index 2.0. Why
good lives don't have to cost the Earth. 2009.
Literacy
Male
Female
1.0
0.9
0.8
0.7
0.6
0.5
Most Free Quartile
2nd Quartile
3rd Quartile
Least Free
Quartile
Most Free ……………. Least Free
Sources: The Fraser Institute; United Nations Development Programmme, Human
Development Indicators 2009, available at http://hdr.undp.org/.
Life Expectancy at Birth and
Economic Freedom Quartiles
80
Years
60
40
20
0
Most Free
Quartile
2nd Quartile
3rd Quartile
Least Free
Quartile
Most Free ……………. Least Free
Sources: The Fraser Institute; The World Bank, World Development Indicators,
2009.
Conclusions
Economic Freedom

Increases prosperity for all
 Reduces poverty
 Increases other freedoms
 Improves quality of life
www.freetheworld.com
www.fraserinstitute.org