economic freedom of the world 2008 annual report
Download
Skip this Video
Download Presentation
Economic Freedom of the World: 2008 Annual Report

Loading in 2 Seconds...

play fullscreen
1 / 62

Economic Freedom of the World: 2008 Annual Report - PowerPoint PPT Presentation


  • 377 Views
  • Uploaded on

Economic Freedom of the World: 2008 Annual Report. Fraser Institute September 16, 2008. 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

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Economic Freedom of the World: 2008 Annual Report' - elina


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
economic freedom of the world 2008 annual report
Economic Freedom of the World: 2008 Annual Report
  • Fraser Institute
  • September 16, 2008
thank you for coming
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
economic freedom of the world project
Economic Freedom of the World Project
  • Objective: find a way to measure economic freedom and explore the connection between it and other indicators
  • 20 year project
  • Led by the late Milton Friedman, Rose Friedman and Michael Walker
  • Involved 60 of the world’s top scholars, including three Nobel Laureates: Milton Friedman, Douglass North, and Gary Becker
what is the economic freedom of the world index
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 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 76 different nations and territories
what is economic freedom
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
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
slide8
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

Cambodia Institute of Development Study, Cambodia

The Fraser Institute, Canada

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, Audentes University, 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

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 (CEED), Montenegro

The Prosperity Foundation, Nepal

The New Zealand Business Roundtable, New Zealand

Institute of 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

Free Society Institute (FSI), Slovenia

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 and Tobago

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

slide9
Sample of Press Coverage for

Fraser Institute’ Economic Freedom of the World 2007

Dawn, Pakistan

Invertia Peru, Peru

Philippine Daily Enquirer, Philippines

Poland Press, Poland

Rompres, Romania

Russian Paper, Russia

Blic Online, Serbia

Finance, Slovenia

Izvoznookno, Slovenia

Slovanian Press agency, Slovenia

The Strait Times, Singapore

IVO.co.za, South Africa

Mail and Guardian, South Africa

News 24, South Africa

Actualidad Economica, Spain

Agencia EFE, Spain

Europa Press, Servicio Economico,

Spain

Invertia, Spain

Terra Espana, Spain

Sudanile website, Sudan

Al Khaleej Newspaper, UAE

Khaleej Times, UAE

Bull & Bear Financial Report, US

Business Journal, US

OpEdNews.com (Newtown,PA)

Public Choice, US

TradingMarkets.com, US

Wall Street Journal, US

Yahoo Finance, US

El Universal, Venezuela

El Nacional, Venezuela

Invertia, Venezuela

Business News, Zambia

Zimbabwe Guardian, Zimbabwe

Zimbabwe Standard, Zimbabwe

All Africa, Africa

Business Day, Africa

Business.lafrica.com, Africa

La Nacion, Argentina

Universia, Argentina

Hetq Online, Armenia

Gulf Daily News, Bahrain

Zero Hora, Brazil

Portal Acionista, Brazil

O'Globo, Brazil

Sofia Echo, Bulgaria

Bulgarian Paper, Bulgaria

Calgary Sun, Canada

Globe and Mail, Canada

National Post, Canada

Toronto Sun, Canada

Toronto Star, Canada

Vancouver Sun, Canada

China Post, China

China Knowledge online, China

Xinhua News, China

Chinese Paper, China

Business Day, Colombia

Listin Diaro, Dominican Republic

El Universon, Ecuador

Faz.net, Germany

German paper, Germany

Die Presse, Germany

Hong Kong Daily, Hong Kong

Living in Hong Kong, Hong Kong

Portfolio, Hungary

Business Standard, India

India Paper, India

Business Standard, International

El Economista, International

Economist, International

US4Arabs, International

Reuters, International

Globes Israel, Israel

Israel Business Area, Israel

Jerusalem Post, Israel

Il Sole, Italy

Al Ghad, Jordan

Alrai Newspaper, Jordan

Addustour Newspaper, Jordan

Greaterkashmir.com, Kashmir

Donga Daily, Korea

Segye Daily, Korea

Baltic Business Weekly, Latvia

Latvian News Agency, Latvia

Baltic Business Weekly, Latvia

Nufooz web, Lebanon

Edge Financial, Malaysia

Edge Daily, Malaysia

Agencia Mexicana de Noticias, Mexico

La Jordana, Mexico

La Cronica, Mexico

UB Post, Mongolia

Republika, Montenegro

Market Montenegro, Montenegro

Scoop, New Zealand

Press, New Zealand

Arabic Paper, Oman

Oman Tribune, Oman

Times of Oman, Oman

Pakistan Press International, Pakistan

The Post, Pakistan

Pakistan Defence, Pakistan

AHN, Pakistan

economic freedom over time
Economic Freedom Over Time

Source: The Fraser Institute.

size of government and the top 10
Size of Government and the Top 10

Source: The Fraser Institute.

sound money and the top 10
Sound Money and the Top 10

Source: The Fraser Institute.

regulations and the top 10
Regulations and the Top 10

Source: The Fraser Institute.

credit market regulations and the top 10
Credit Market Regulations and the Top 10

Source: The Fraser Institute.

labor market regulations and the top 10
Labor Market Regulations and the Top 10

Source: The Fraser Institute.

business regulations and the top 10
Business Regulations and the Top 10

Source: The Fraser Institute.

why is economic freedom important
Why is Economic Freedom Important?
  • Economic rights are fundamental rights in the sense that without them there can be no political or civil freedoms
  • They are a prerequisite for growth and development
  • They are a prerequisite for broader human development
income per person of the bottom ten
Income (per person) of the Bottom Ten

Sources: The Fraser Institute; The World Bank, World Development Indicators, 2008.

income per person of the top 10
Income (per person) of the Top 10

Sources: The Fraser Institute; The World Bank, World Development Indicators, 2008.

per capita income and economic freedom quartile
Per Capita Income and Economic Freedom Quartile

Least Free ………………... Most Free

Sources: The Fraser Institute; The World Bank, World Development Indicators, 2008.

foreign direct investment and economic freedom quartile
Foreign Direct Investment and Economic Freedom Quartile

Least Free ……………...…... Most Free

Sources: The Fraser Institute; The World Bank, World Development Indicators, 2008.

income share of the poorest 10 and economic freedom
Income Share of the Poorest 10% and Economic Freedom

Least Free …………….. Most Free

Sources: The Fraser Institute; The World Bank, World Development Indicators, 2008.

income level of the poorest 10 and economic freedom
Income Level of the Poorest 10% and Economic Freedom

Least Free …………….. Most Free

Sources: The Fraser Institute; The World Bank, World Development Indicators, 2008.

economic freedom and political rights higher ratings indicate higher levels of political rights
Economic Freedom and Political RightsHigher ratings indicate higher levels of political rights

Least Free …………………. Most Free

Sources: The Fraser Institute; Freedom House, Freedom in the World Country Ratings, 2006, available at http://www.freedomhouse.org/.

economic freedom and civil liberties higher ratings indicate higher levels of civil liberties
Economic Freedom and Civil LibertiesHigher ratings indicate higher levels of civil liberties

Least Free …………………… Most Free

Sources: The Fraser Institute; Freedom House, Freedom in the World Country Ratings, 2006, available at http://www.freedomhouse.org/.

economic freedom and corruption lower values indicate lower levels of corruption
Economic Freedom and CorruptionLower values indicate lower levels of corruption

Least Free …………………. Most Free

Sources: The Fraser Institute; Transparency International, Corruption Perceptions Index, 2006/2007, available at http://www.transparency.org.

slide44
The impact of Economic Freedom on the UN’s Human Development Index and other indicators of well-being
slide45
Human Development Index and Economic Freedom QuartilesHigher ratings indicate higher levels of development

Least Free ……………. Most Free

Sources: The Fraser Institute; United Nations Development Programmme, Human Development Indicators 2008, available at http://hdr.undp.org/.

life expectancy at birth and economic freedom quartiles
Life Expectancy at Birth and Economic Freedom Quartiles

Least Free ……………. Most Free

Sources: The Fraser Institute; The World Bank, World Development Indicators, 2008.

infant mortality and economic freedom quartile
Infant Mortality and Economic Freedom Quartile

Least Free ………..………. Most Free

Sources: The Fraser Institute; The World Bank, World Development Indicators, 2008.

of population using improved water sources
% of Population Using Improved Water Sources

Least Free ………………... Most Free

Sources: The Fraser Institute; The World Bank, World Development Indicators, 2008.

slide49
Environmental Performance and Economic Freedom QuartileHigher ratings indicate higher levels of environmental performance

Least Free ………..……….. Most Free

Sources: The Fraser Institute; The World Bank, World Development Indicators, 2008.

economic freedom and world poverty
Economic Freedom and World Poverty
  • Eradication of world poverty: a crucial matter for economist, policy makers and concerned citizens
  • Seth W. Norton and James D. Gwartney, in chapter 2, explore the relationship between economic freedom and poverty in developing nations
economic freedom and world poverty52
Economic Freedom and World Poverty

Facts

  • Both the $1-per-day and the $2-per-day poverty rates have declined since 1980
  • The weighted (by population) mean poverty rate indicates that the overall $1-per-day poverty rate of developing countries was nearly cut in half between 1980 and 2004 (from 32% to 17%)
  • Furthermore, various non-pecuniary indicators of poverty also imply that the well-being of the poor has improved during the past quarter of a century
economic freedom and world poverty54
Economic Freedom and World Poverty

Empirical Evidence

  • The results confirm a strong positive relationship between economic freedom and poverty reduction
  • Specifically, the weighted $1-per-day poverty rate was 29.7% in 2004 for countries with EFW ratings of less than 5, but only 7.7% for countries with EFW ratings between 6 and 7
  • And the $2-per-day poverty rate declines from 51.5% to 46.2% to 38.9% as one moves from the least (less than 5) to the most free (between 6 and 7) developing nations
  • A one-unit increase in economic freedom rating between 1980 and 1995 was associated with a 5.21 percentage-point reduction in the $1-per-day poverty rate and a 5.22 percentage-point reduction in the $2-per-day poverty rate
economic freedom and world poverty56
Economic Freedom and World Poverty

Empirical Evidence

  • The authors also examine the relationship between economic freedom and non-pecuniary set of poverty indicators:
          • % of population with access to improved water
          • Life expectancy at birth, total (years)
          • Infant survival rate (per 1000)
          • Under-five survival rate (per 1000)
          • Physicians (per 1,000 people)
          • % of population with adequate nourishment
          • UN Human poverty index
  • The results shows once again that poverty rates are substantially lower in persistently free developing nations compare to the economies with lower levels of economic freedom
economic freedom and world poverty57
Economic Freedom and World Poverty

Empirical Evidence

  • 72.6% of the population has access to safe water in the mostly unfree economies (less than 5) compared to nearly 100% in the mostly free developing nations (more than 7)
  • Life expectancy of people in the mostly free group is over 20-years greater than for those in mostly unfree developing economies
  • Mostly free economies have more than twice as many physicians per 1,000 population than mostly unfree economies
economic freedom and world poverty58
Economic Freedom and World Poverty

Empirical Evidence

  • For every 1,000 births, 64 more babies survive in mostly free developing countries per year than in the mostly unfree developing nations
  • For every thousand children under age of five, 109 more children survive in mostly free developing nations each year than in those countries that are mostly unfree
policy implications
Policy Implications
  • Developing nations need to focus on increasing economic freedom to promote growth and reduce poverty
  • Reductions in poverty rates are closely related to institutions and policies consistent with economic freedom
  • Growth is the driving force behind reductions in poverty. Without economic growth, there will be little or no reduction in poverty
policy implications for africa
Policy Implications for Africa

The authors investigate high poverty levels in Sub- Saharan Africa and find these nations need to increase economic freedom. Specifically, they need to

  • Build the rule of law to protect property rights, encourage investment, and reduce corruption
  • Remove trade barriers so that African nations, which tend to have small domestic market, can achieve gains from trade
  • Simplify business regulations to encourage investment by eliminating unnecessary regulatory barriers, reduce corruption, and lower administrative costs on businesses
conclusions
Conclusions

Economic Freedom

  • Increases prosperity for all
  • Reduces poverty
  • Increases other freedoms
  • Improves quality of life
ad