Hong Kong and Singapore rated best for economic freedom, Zimbabwe and Myanmar rank worst
VANCOUVER, BC—Hong Kong once again tops international rankings for economic freedom, with Singapore a close second and New Zealand in third spot, according to the Economic Freedom of the World: 2007 Annual Report, released today by independent research organization The Fraser Institute.
Switzerland was ranked fourth followed by the United States, United Kingdom and Canada all tied for fifth spot.
Zimbabwe, Myanmar and the Democratic Republic of Congo had the lowest economic freedom ratings of the 141 countries measured.
The annual peer-reviewed report uses 42 different measures to create an index ranking countries around the world based on policies that encourage economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to compete, and security of private property.
Research shows that individuals living in countries with high levels of economic freedom enjoy higher levels of prosperity, greater individual freedoms, and longer life spans.
“These measures are part of a fundamental base needed to build a free and prosperous nation. A quick glance at the names of countries scoring lowest on the index quickly shows that without protection of property rights and judicial independence, there is little individual freedom and little in the way of prosperity,” said said Fred McMahon, The Fraser Institute’s Director of Trade and Globalization Studies.
In this year’s main index, Hong Kong retains the highest rating for economic
freedom, 8.9 out of 10. The other top scorers are: Singapore (8.8), New
Zealand (8.5), Switzerland (8.3), Canada (8.1), United Kingdom (8.1), United
States (8.1), Estonia (8.0), Australia (7.9), and Ireland (7.9).
The rankings and scores of other large economies are Germany, 18 (7.6); Japan, 22 (7.5); Mexico, 44 (7.1); France, 52 (7.0); Italy, 52 (7.0); India, 69 (6.6); China, 86 (6.3); Brazil, 101 (6.0); and Russia, 112 (5.8).
The majority of nations ranked near the bottom are African and all the nations in the bottom 10 are African, with the exceptions of Venezuela and Myanmar.
They are: Zimbabwe (2.9), Myanmar (3.8), the Democratic Republic of the Congo, (4.0), Angola (4.2), the Republic of the Congo, (4.3), Central Africa Republic, (4.6), Venezuela (4.9), Burundi (5.0), Chad (5.1), Togo (5.1) and Niger (5.1). Botswana’s ranking, tied for 38th with a score of 7.2, is the best among sub-Saharan African nations.
Five nations increased their score by more than three points since 1980: Hungary (3.0),
Peru (3.0), Uganda (3.2), Ghana (3.6), and Israel (3.7). Only three nations decreased
their score by more than one point: Zimbabwe (−1.7), Venezuela (−1.7) and Myanmar
(−1.3). Other nations that saw reductions are: Nepal (−0.7), Bahrain (−0.3), Hong
Kong (−0.2), Malaysia (−0.2), the Republic of Congo (−0.2), and Haiti (−0.1).
“Weakness in the rule of law and property rights is particularly pronounced in sub-
Saharan Africa, in many parts of the Middle East, and for several nations that were
part of the former Soviet bloc although some of these nations have shown
improvement,” said James Gwartney, lead author of the report and a Professor of
Economics at Florida State University.
“Many Latin American and Southeast Asian nations also score poorly for rule of law
and property rights. The nations that rank poorly in this category also tend to score
poorly in the trade and regulation categories, even though several have reasonably
sized governments and sound money.”
This year 11 additional countries have been added to the index. These countries are
Angola (4.2, 138th), Bosnia and Herzegovina (6.1, 97th), Burkina Faso (5.5, 122nd),
Ethiopia (6.0, 101st), Kazakhstan (7.3, 32nd), Kyrgyz Republic (6.8, 60th), Lesotho (6.8,
60th), Mauritania (6.5, 76th), Moldova (6.5, 76th), Montenegro (6.8, 60th), and Serbia
Global Spread of Economic Freedom
The 2007 edition of the Economic Freedom of the World report also includes new
research from Russell Sobel, economics professor at West Virginia University, and
Peter Leeson, professor in the study of capitalism at George Mason University,
showing how economic freedom spreads between countries.
Sobel and Leeson note that historically, many foreign policy decisions have been
based on the notion that economic reforms in a few key nations would substantially
improve the economies of other countries throughout the region – the so-called
The authors conclude that while economic freedom changes in one country have only
a modest impact on neighbouring countries, when multiple neighbours experience
simultaneous changes in economic freedom, the impact is much greater. Broad
regional changes in freedom can and do have significant impacts on surrounding
countries. By liberalizing trade with foreign nations, economically free countries can
exert a positive, if modest, impact on economic freedom in less free nations.
This research indicates that free-trade agreements allowing a number of nations to
simultaneously coordinate trade liberalization could have a sizeable influence on
spreading economic freedom to economically repressed regions of the world, Sobel
and Leeson said.
About the Fraser Institute Economic Freedom Index
Economic Freedom of the World measures the degree to which the policies and
institutions of countries are supportive of economic freedom.
This year’s publication ranks 141 nations for 2005, the most recent year for which data
are available. The report also updates data in earlier reports in instances where data
have been revised.
The annual report is published in conjunction with the Economic Freedom Network, a
group of independent research and educational institutes in over 70 nations.
For more information on the Economic Freedom Network, data sets, and previous
Economic Freedom of the World reports, visit www.freetheworld.com