The foundations of economic freedom are personal choice, voluntary exchange, and open markets. As Adam Smith, Milton Friedman, and Friedrich Hayek have stressed, freedom of exchange and market coordination provide the fuel for economic progress. Without exchange and entrepreneurial activity coordinated through markets, modern living standards would be impossible.
Potentially advantageous exchanges do not always occur. Their realization is dependent on the presence of sound money, rule of law, and security of property rights, among other factors. Economic Freedom of the World seeks to measure the consistency of the institutions and policies of various countries with voluntary exchange and the other dimensions of economic freedom. The report is copublished by the Cato Institute, the Fraser Institute in Canada and more than 70 think tanks around the world.
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Economic Freedom of the World: 2013 Annual Report
By James Gwartney, Robert Lawson, and Joshua Hall, and contributions from Alice M. Crisp, Bodo Knoll, Hans Pitlik, and Martin Rode . |
Global economic freedom increased modestly in this year's report, though it remains below its peak level of 6.92 in 2007. After a global average drop between 2007 and 2009, the average score rose to 6.87 in 2011, the most recent year for which data is available. In this year's index, Hong Kong retains the highest rating for economic freedom, 8.97 out of 10. The rest of this year's top scores are Singapore, 8.73; New Zealand, 8.49; Switzerland, 8.30; United Arab Emirates, 8.07; Mauritius, 8.01; Finland, 7.98; Bahrain, 7.93; Canada, 7.93; and Australia, 7.88. The United States, long considered the standard bearer for economic freedom among large industrial nations, has experienced a substantial decline in economic freedom during the past decade. From 1980 to 2000, the United States was generally rated the third freest economy in the world, ranking behind only Hong Kong and Singapore. After increasing steadily during the period from 1980 to 2000, the chain linked EFW rating of the United States fell from 8.65 in 2000 to 8.21 in 2005 and 7.74 in 2011. The chain-linked ranking of the United States has fallen precipitously from second in 2000 to eighth in 2005 to 19th in 2011 (unadjusted rating of 17th). The rankings (and scores) of other large economies in this year's index are the United Kingdom, 12th (7.85); Germany, 19th (7.68); Japan, 33rd (7.50); France, 40th (7.38); Italy, 83rd (6.85); Mexico, 94th (6.64); Russia, 101st (6.55); Brazil, 102nd (6.51); India, 111th (6.34); and China, 123rd (6.22). Nations in the top quartile of economic freedom had an average per-capita GDP of $36,446 in 2011, compared to $4,382 for nations in the bottom quartile in 2011 current international dollars. In the top quartile, the average income of the poorest 10% was $10,556, compared to $932 in the bottom quartile in 2011 current international dollars. Interestingly, the average income of the poorest 10% in the most economically free nations is more than twice the overall average income in the least free nations. Life expectancy is 79.2 years in nations in the top quartile compared to 60.2 years in those in the bottom quartile, and political and civil liberties are considerably higher in economically free nations than in unfree nations. The first Economic Freedom of the World Report, published in 1996, was the result of a decade of research by a team which included several Nobel Laureates and over 60 other leading scholars in a broad range of fields, from economics to political science, and from law to philosophy. This is the 17th edition of Economic Freedom of the World and this year's publication ranks 152 nations for 2011, the most recent year for which data are available. Contents: |
Economic Freedom of the World: 2012 Annual Report
By James Gwartney, Robert Lawson, and Joshua Hall, and contributions from Scott L. Baier, Christian Bjørnskov, Matthew Clance, Alice M. Crisp, Axel Dreher, Gerald P. Dwyer, Nicolai J. Foss, and Kai Gehring . |
Global economic freedom bounced back slightly in this year's report. After falling for two consecutive years following a long trend of increases, the average score rose from 6.79 in 2009 to 6.83 in 2010, the most recent year for which data is available. In this year's index, Hong Kong retains the highest rating for economic freedom, 8.90 out of 10 (down slightly from 9.01 last year). The rest of this year's top scores are Singapore, 8.69; New Zealand, 8.36; Switzerland, 8.24; Australia, 7.97; Canada, 7.97; Bahrain, 7.94; Mauritius, 7.90. Finland, 7.88; and Chile, 7.84. Bahrain and Finland are new to the top 10 — replacing, notably, the United Kingdom (fell to 12th) and the United States (a sizable drop to 18th). The United States, long considered the standard bearer for economic freedom among large industrial nations, has experienced a substantial decline in economic freedom during the past decade. From 1980 to 2000, the United States was generally rated the third freest economy in the world, ranking behind only Hong Kong and Singapore. After increasing steadily during the period from 1980 to 2000, the chain linked EFW rating of the United States fell from 8.65 in 2000 to 8.21 in 2005 and 7.70 in 2010. The chain-linked ranking of the United States has fallen precipitously from second in 2000 to eighth in 2005 and 19th in 2010 (unadjusted ranking of 18th). The rankings (and scores) of other large economies in this year's index are Japan, 20th (7.64); Germany, 31st (7.52); France, 47th (7.32); Italy, 83rd (6.77); Mexico, 91st, (6.66); Russia, 95th (6.56); Brazil, 105th (6.37); China, 107th (6.35); and India, 111th (6.26). Nations in the top quartile of economic freedom had an average per-capita GDP of $37,691 in 2010, compared to $5,188 for bottom quartile nations in 2010 current international dollars. In the top quartile, the average income of the poorest 10% was $11,382, compared to $1,209 in the bottom in 2010 current international dollars. Interestingly, the average income of the poorest 10% in the most economically free nations is more than twice the overall average income in the least free nations. Life expectancy is 79.5 years in the top quartile compared to 61.6 years in the bottom quartile, and political and civil liberties are considerably higher in economically free nations than in unfree nations. Contents: |
Economic Freedom of the World: 2011 Annual Report
By James Gwartney, Joshua Hall, and Robert Lawson and contributions from Jean-Pierre Chauffour, Michael D. Stroup |
This year's report notes that economic freedom fell for the second consecutive year. The average economic freedom score rose from 5.53 (out of 10) in 1980 to 6.74 in 2007, but fell back to 6.64 in 2009, the most recent year for which data are available. In this year's index, Hong Kong retains the highest rating for economic freedom, 9.01 out of 10, followed by Singapore, New Zealand, Switzerland, Australia, Canada, Chile, the United Kingdom, and Mauritius. The world's largest economy, the United States, has suffered one of the largest declines in economic freedom over the last 10 years, pushing it into tenth place. Much of this decline is a result of higher government spending and borrowing and lower scores for the legal structure and property rights components. This year's report also contains new research comparing policies that promote "freedom" compared to "entitlement" in relation to economic development. The findings suggest that fundamental freedoms are paramount in explaining long-term economic growth. Countries that favor free choice — economic freedom and civil and political liberties — over entitlement rights are likely to achieve higher sustainable economic growth and to achieve many of the distinctive proximate characteristics of success identified by the Commission on Growth and Development (World Bank, 2008). In contrast, pursuing entitlement rights through greater coercion by the state is likely to be self-defeating in the long run. The report also includes findings on the positive relationship between increases in economic freedom and improvements in women's well-being. Contents: |
Economic Freedom of the World: 2010 Annual Report
By James Gwartney, Joshua Hall, and Robert Lawson and contributions from Christopher J. Coyne, John W. Dawson, Horst Feldmann, John Levendis, Russell L. Stobel, and Edward Peter Stringham |
This year's report notes that economic freedom suffered its first setback in decades. The average economic freedom score rose from 5.55 (out of 10) in 1980 to 6.70 in 2007, but fell back to 6.67 in 2008, the most recent year for which data are available. Of the 123 countries with chain-linked ratings in 2007 and 2008, 88 exhibited rating decreases and only 35 recorded rating increases. In this year?s index, Hong Kong retains the highest rating for economic freedom, 9.05 out of 10, followed by Singapore, New Zealand, Switzerland, Chile, the United States, Canada, Australia, Mauritius, and the United Kingdom. This year's report also contains new research showing the impact of economic freedom on unemployment rates and homicides. According to Horst Feldmann, more economic freedom appears to reduce joblessness, and the magnitude of the effect seems to be substantial, especially among young people. Edward Peter Stringham and John Levendis examine the effect of economic freedom on rates of homicide in Venezuela, Colombia, South Africa, Latvia, and Lithuania. The results suggest that increases in economic freedom lead to decreases in homicides. Contents: |
Economic Freedom of the World: 2009 Annual Report
By James Gwartney and Robert Lawson with the assistance of Joshua Hall and contributions from Herbert Grubel, Jakob de Haan, Jan-Egbert Sturm, and Eelco Zandberg |
The short-term response of governments to the global economic downturn will almost surely reduce economic freedom, but history shows that this need not be the case over a longer time frame. In new research published in this year?s report, Jakob de Haan, Jan-Egbert Sturm, and Eelco Zandberg show that several countries that have experienced financial crises have moved toward greater economic freedom in subsequent years. The impact on economic freedom depends on what we learn from the crisis. Will we move toward institutions and policies more consistent with economic freedom? Or will we politicize, micromanage, and expand the size and role of government? The route that is chosen matters because higher levels of economic freedom are strongly related to greater prosperity and human well-being. This year's report notes that economic freedom remains on the rise. The average economic freedom score rose from 5.55 (out of 10) in 1980 to 6.70 in the most recent year for which data are available. Of the 103 nations with chain-linked scores going back to 1980, 92 saw an improved score and 11 saw a decrease. In this year?s index, Hong Kong retains the highest rating for economic freedom, 8.97 out of 10, followed by Singapore, New Zealand, Switzerland, Chile, the United States, Ireland, Canada, Australia, and the United Kingdom. Contents: |
Economic Freedom of the World: 2008 Annual Report
By James Gwartney and Robert Lawson with Seth Norton |
A global effort has been devoted to reducing world poverty. Some claim poverty can be best combated by foreign aid. Others point to the importance of domestic policies, such as those that support or weaken economic freedom. In new research published in this year?s report, Seth Norton and James Gwartney investigate the connection between economic freedom and poverty. Using various measures of poverty, Norton and Gwartney find a strong positive relationship between economic freedom and poverty reduction and call for more research in this area. This year's report notes that economic freedom remains on the rise. The average economic freedom score rose from 5.46 (out of 10) in 1980 to 6.65 in the most recent year for which data are available. Of the 102 nations with chain-linked scores going back to 1980, 89 saw an improved score and 13 saw a decrease. In this year?s index, Hong Kong retains the highest rating for economic freedom, 8.94 out of 10, followed by Singapore, New Zealand, Switzerland, United Kingdom, Chile, Canada, United States, Australia, and Ireland. Contents: |
Economic Freedom of the World: 2007 Annual Report
By James Gwartney and Robert Lawson with Russel S. Sobell and Peter T. Leeson |
Is capitalism contagious? If so, to what extent; and how does it spread? In new research published in this year?s report, Russell S. Sobel and Peter T. Leeson examine these questions empirically. They find that economic freedom does in fact spread, although not as strongly as might be suggested by the emphasis this idea has been given in US foreign policy. In the report, Sobel and Leeson discuss the implications of these results for foreign policy and offers some predictions about the future path, and spread, of global economic freedom. This year's report notes that economic freedom remains on the rise. The average economic freedom score rose from 5.1 (out of 10) in 1980 to 6.6 in the most recent year for which data are available. Of the 102 nations with scores in 1980 and in the most recent index, 90 recorded improvements in their economic freedom score, and just nine saw a decline. In this year's index, Hong Kong retains the highest rating for economic freedom, 8.9 out of 10, followed by Singapore, New Zealand, Switzerland, Canada, United Kingdom, and the United States. Contents: |
Economic Freedom of the World: 2006 Annual Report
By James Gwartney and Robert Lawson with William Easterly |
The United Nations and other bodies have called for more foreign aid to help lift developing nations out of poverty. Yet in new research published in this year?s report, William Easterly, an economist from New York University, finds that economic freedom has a strong and positive impact on growth, and that foreign aid does not. He dispels the notion of a "poverty trap" and shows that poor countries with more economic freedom grow faster than rich countries This year's report notes that economic freedom remains on the rise. The average economic freedom score rose from 5.1 (out of 10) in 1980 to 6.5 in the most recent year for which data are available. Of the 102 nations with scores in 1980 and in the most recent index, 98 recorded improvements in their economic freedom score, four saw a decline. In this year's index, Hong Kong retains the highest rating for economic freedom, 8.7 out of 10, followed by Singapore at 8.5. New Zealand, Switzerland, and the United States tied for third with ratings of 8.2. Ireland and the United Kingdom are tied for 6th at 8.1. Canada ranked 8th with a rating of 8.0. Iceland and Luxembourg are tied for 9th at 7.9. Contents: |
Economic Freedom of the World: 2005 Annual Report
By James Gwartney and Robert A. Lawson with Erik Gartzke |
Economic freedom is almost 50 times more effective than democracy in restraining nations from going to war. In new research published in this year?s report, Erik Gartzke, a political scientist from Columbia University, compares the impact of economic freedom on peace to that of democracy. When measures of both economic freedom and democracy are included in a statistical study, economic freedom is about 50 times more effective than democracy in diminishing violent conflict. The impact of economic freedom on whether states fight or have a military dispute is highly significant while democracy is not a statistically significant predictor of conflict. This year?s report notes that economic freedom remains on the rise. The average economic freedom score rose from 5.2 (out of 10) in 1985 to 6.4 in the most recent year for which data are available. In this year?s index, Hong Kong retains the highest rating for economic freedom, 8.7 of 10, closely followed by Singapore at 8.5. New Zealand, Switzerland, and the United States tied for third with ratings of 8.2. The United Kingdom, Canada, and Ireland ranked 6th, 7th, and 8th, respectively. Australia, Estonia, Luxembourg, and the United Arab Emirates tied for 9th. Contents: |
Potentially advantageous exchanges do not always occur. Their realization is dependent on the presence of sound money, rule of law, and security of property rights, among other factors. Economic Freedom of the World seeks to measure the consistency of the institutions and policies of various countries with voluntary exchange and the other dimensions of economic freedom. The report is copublished by the Cato Institute, the Fraser Institute in Canada and more than 50 think tanks around the world.
Economic Freedom of the World: 2005 Annual Report
 By James Gwartney and Robert A. Lawson with Erik Gartzke |
Economic freedom is almost 50 times more effective than democracy in restraining nations from going to war. In new research published in this year?s report, Erik Gartzke, a political scientist from Columbia University, compares the impact of economic freedom on peace to that of democracy. When measures of both economic freedom and democracy are included in a statistical study, economic freedom is about 50 times more effective than democracy in diminishing violent conflict. The impact of economic freedom on whether states fight or have a military dispute is highly significant while democracy is not a statistically significant predictor of conflict. This year?s report notes that economic freedom remains on the rise. The average economic freedom score rose from 5.2 (out of 10) in 1985 to 6.4 in the most recent year for which data are available. In this year?s index, Hong Kong retains the highest rating for economic freedom, 8.7 of 10, closely followed by Singapore at 8.5. New Zealand, Switzerland, and the United States tied for third with ratings of 8.2. The United Kingdom, Canada, and Ireland ranked 6th, 7th, and 8th, respectively. Australia, Estonia, Luxembourg, and the United Arab Emirates tied for 9th. Contents: |
Economic Freedom of the World: 2004 Annual Report
By James Gwartney and Robert Lawson |
Contents: Table of Contents and Acknowledgments Executive Summary [pdf, 53Kb] Chapter 1 [pdf, 520Kb] Chapter 2 [pdf, 290Kb] Chapter 3, Country Data A through C [pdf, 256Kb] Chapter 3, Country Data D through J [pdf, 227Kb] Chapter 3, Country Data K through P [pdf, 228Kb] Chapter 3, Country Data R through Z [pdf, 230Kb] Appendix 1 [pdf, 126Kb] Appendix 2 [pdf, 123Kb]
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Economic Freedom of the World: 2003 Annual Report
By James Gwartney and Robert Lawson |
Contents: Table of Contents and Acknowledgments [pdf, 211Kb] Executive Summary [pdf, 96Kb] Chapter 1 [pdf, 337Kb] Chapter 2 [pdf, 180Kb] Chapter 3, Country Data A through C [pdf, 297Kb] Chapter 3, Country Data D through J [pdf, 232Kb] Chapter 3, Country Data K through P [pdf, 236Kb] Chapter 3, Country Data R through Z [pdf, 236Kb] |
Economic Freedom of the World: 2002 Annual Report
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Contents: Table of Contents, Acknowledgments, and Executive Summary [pdf, 291Kb] Chapter 1 [pdf, 331Kb] Chapter 2 [pdf, 162Kb] Chapter 3 [pdf, 265Kb] Chapter 4 Country Data A through C [pdf, 315Kb] Chapter 4 Country Data D through J [pdf, 239Kb] Chapter 4 Country Data K through P [pdf, 243Kb] Chapter 4 Country Data R through Z [pdf, 244Kb] |
| By James Gwartney and Robert Lawson, with Chris Edwards, Walter Park, Veronique de Rugy and Smita Wagh |
Economic Freedom of the World: 2001 Annual Report
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Contents: Table of Contents, Acknowledgments, and Executive Summary [pdf, 116Kb] Chapter 1 [pdf, 162Kb] Chapter 2 [pdf, 161Kb] Chapter 2 Tables [pdf, 114Kb] Chapter 3 [pdf, 158Kb] Chapter 3 Tables [pdf, 63Kb] Chapter 4 [pdf, 198Kb] Chapter 5 [pdf, 22Kb] Chapter 5 Tables [pdf, 575Kb] |
| By James Gwartney and Robert Lawson with Walter Park and Charles Skipton |
The data from Economic Freedom of the World is available for download free-of-charge at Freetheworld.com .
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