Freest economies are the best
Wednesday, 19 March 2008
Andrzej Zwaniecki
COUNTRIES and regions that promote economic freedom are more likely to enjoy prosperity than those that restrict such freedom, according to a recent report by a business publisher and a research group.
Economic freedom strongly correlates with good economic performance of a country or a territory and economic opportunities for its people, according to the 2008 Index of Economic Freedom prepared by The Wall Street lournal and the Heritage Foundation, a conservative policy research group.
The January publication scores 157 economies on 10 measures of economic freedom: business, trade, fiscal, monetary, investment, financial and labour freedoms as well as government size, property rights and corruption.
The freest one-fifth of the world's economies has more than five times the average per capita income of the least-free one-fifth. The most liberalised economies also have lower rates of unemployment and inflation, according to the report.
Higher growth rates of gross domestic product seem to create a re-enforcing cycle by prompting further improvements in economic freedom, according to report's authors. Data collected over the 14 years the index has been published, strongly suggesting that nations and regions that improve their business climates and open their economies experience faster growth rates, the report said.
Carl Schramm, president of the Kauffman Foundation, which works to create an entrepreneurial economy, said that growth-driven innovation stems from sound macroeconomic policies, the speed of economic evolution and entrepreneurial dynamism. His essay was published in the print versions of the report.
Hong Kong, Singapore, Ireland, Australia and the United States were ranked as the top five economies in terms of freedom, and Burma, Libya, Zimbabwe, Cuba and North Korea as the least free. Half of the top 20 economies are in Europe, and Europe is the freest region. The only other region that scored above the global average was the Americas. However, Latin America has seen the erosion of economic freedom due to reversals of free-market policies or stagnation of economic reforms in some countries, according to the report.
Among individual countries, Egypt, Mauritius and Mongolia have improved their scores most in the past year, the report said.
Overall, global economic liberty remains roughly at the same level as in the previous year, which was the second highest in the index's history, despite rising protectionist sentiments, terrorism threat, rising energy prices and climate-change worries, according to Mary O'Grady, a member of The Wall Street Journal editorial board and a report co-author.
On average, countries and regions in the survey have received the highest scores on fiscal, monetary and trade freedoms and the lowest on property rights and freedom from corruption. The report also says that tax reform is badly needed in almost all economies.
....................................
By Courtesy: The US Embassy in Dhaka
COUNTRIES and regions that promote economic freedom are more likely to enjoy prosperity than those that restrict such freedom, according to a recent report by a business publisher and a research group.
Economic freedom strongly correlates with good economic performance of a country or a territory and economic opportunities for its people, according to the 2008 Index of Economic Freedom prepared by The Wall Street lournal and the Heritage Foundation, a conservative policy research group.
The January publication scores 157 economies on 10 measures of economic freedom: business, trade, fiscal, monetary, investment, financial and labour freedoms as well as government size, property rights and corruption.
The freest one-fifth of the world's economies has more than five times the average per capita income of the least-free one-fifth. The most liberalised economies also have lower rates of unemployment and inflation, according to the report.
Higher growth rates of gross domestic product seem to create a re-enforcing cycle by prompting further improvements in economic freedom, according to report's authors. Data collected over the 14 years the index has been published, strongly suggesting that nations and regions that improve their business climates and open their economies experience faster growth rates, the report said.
Carl Schramm, president of the Kauffman Foundation, which works to create an entrepreneurial economy, said that growth-driven innovation stems from sound macroeconomic policies, the speed of economic evolution and entrepreneurial dynamism. His essay was published in the print versions of the report.
Hong Kong, Singapore, Ireland, Australia and the United States were ranked as the top five economies in terms of freedom, and Burma, Libya, Zimbabwe, Cuba and North Korea as the least free. Half of the top 20 economies are in Europe, and Europe is the freest region. The only other region that scored above the global average was the Americas. However, Latin America has seen the erosion of economic freedom due to reversals of free-market policies or stagnation of economic reforms in some countries, according to the report.
Among individual countries, Egypt, Mauritius and Mongolia have improved their scores most in the past year, the report said.
Overall, global economic liberty remains roughly at the same level as in the previous year, which was the second highest in the index's history, despite rising protectionist sentiments, terrorism threat, rising energy prices and climate-change worries, according to Mary O'Grady, a member of The Wall Street Journal editorial board and a report co-author.
On average, countries and regions in the survey have received the highest scores on fiscal, monetary and trade freedoms and the lowest on property rights and freedom from corruption. The report also says that tax reform is badly needed in almost all economies.
....................................
By Courtesy: The US Embassy in Dhaka