More important than country rankings in the Fraser Institute’s annual Economic Freedom of the World (EFW) report are indications of fading appreciation for the ability of individuals to make their own economic decisions.
The Canadian think tank, a free-market advocate, measures that ability by analyzing policies and institutions of 162 countries and territories. Its EFW index reflects regulation, freedom to trade internationally, size of government, sound legal system and property rights, and government spending and taxation.
In the new report, based on 2016 data, Hong Kong, as usual, emerges as the most economically free country. It’s followed, in order, by Singapore, New Zealand, Switzerland, Ireland, the US, Georgia, Mauritius, the UK, and Australia and Canada, which tied for 10th place.
The 10 least-free countries are, in descending order, Sudan, Guinea-Bissau, Angola, Central African Republic, Republic of Congo, Syria, Algeria, Argentina, Libya, and Venezuela. Some countries, including North Korea and Cuba, aren’t ranked because of a lack of data.
“The cornerstones of economic freedom are personal choice, voluntary exchange, open markets, and clearly defined and enforced property rights,” the study asserts. “Individuals are economically free when they are permitted to choose for themselves and engage in voluntary transactions as long as they do not harm the person or property of others.” Economically free individuals, it adds “will be permitted to decide for themselves rather than having options imposed on them by the political process or the use of violence, theft, or fraud by others.”
Flagging appreciation for those values is evident in a survey measure the Fraser report calls Free Market Mentality Index.
During 1990-2014, it says, “We see a strong change from a popular appreciation of the market economy to a perspective more supportive of the role of government.”
The trend helps explain stagnation of the world-level EFW index after the high-growth 1980s and 1990s, the report says.
But attitudes change. People eventually learn that the more they depend on government, the more they eventually pay.
See Venezuela.
(From the subscription area of www.ogj.com, posted Oct. 5, 2018. To comment, join the Commentary channel at www.ogj.com/oilandgascommunity.)