Economic Freedom in Decline
Cato announces the annual report, Economic Freedom in the World:
Global economic freedom fell slightly in this year’s report, and it remains well below its peak level of 6.92 in 2007. The average score fell to 6.84 in 2012, the most recent year for which data is available. In this year’s index, Hong Kong retains the highest rating for economic freedom, 8.98 out of 10. The rest of this year’s top scores are Singapore, 8.54; New Zealand, 8.25; Switzerland, 8.19; Mauritius, 8.09; United Arab Emirates, 8.05; Canada, 8.00; Australia, 7.87; Jordan, 7.86; and, tied for 10th at 7.84, Chile and Finland.
The United States, once considered a bastion of economic freedom, now ranks 12th in the world, tied with the United Kingdom at 7.81. Due to a weakening rule of law, increasing regulation, and the ramifications of wars on terrorism and drugs, the United States has seen its economic freedom score plummet in recent years, compared to 2000 when it ranked second globally.
The rankings of other large economies in this year’s index are Japan (23rd), Germany (28th), South Korea (33rd), France (58th), Italy (79th), Mexico (91st), Russia (98th), Brazil (103rd), India (110th), and China (115th).
Nations in the top quartile of economic freedom had an average per capita GDP of US$39,899 in 2012, compared to US$6,253 for bottom quartile nations. Moreover, the average income of the poorest 10 per cent in the most economically free countries in 2012, US$11,610, was almost double the overall average income in the least free countries. Life expectancy is 79.9 years in the top quartile compared to 63.2 years 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 18th edition of Economic Freedom of the World and this year’s publication ranks 152 nations for 2012, the most recent year for which data are available.
