Economic Freedom of the World: 2009 Annual Report Released

By Dr. Gorawut Numnak

The Fraser Institute, Canada's leading economic think tank, has just released its annual report on economic freedom. The Economic Freedom of the World (EFW) report is a peer-reviewed publication, seeking to measure the degree to which the policies and institutions of countries are supportive of economic freedom. This is the 13th edition of EFW and this year's report ranks 141 countries for 2007, the most recent year for which comprehensive data are available.

Officially released on 14 September, the 2009 edition of EFW report notes that economic freedom remains on the rise. The average score rose from 5.55 in 1980 to 6.70 in 2007. Hong Kong (8.97 out of 10) retains the highest rating for economic freedom, followed closely by Singapore (8.66), New Zealand (8.30), Switzerland (8.19) and Chile (8.14). Zimbabwe (2.89) has the lowest level of economic freedom, followed by Myanmar (3.69), Angola (4.04) and Venezuela (4.33).

The authors use 42 different measures to create an index raking countries around the world based on policies that encourage economic freedom. The foundations of economic freedom are personal choice, voluntary exchange, and open markets. Economic Freedom is measured in five different areas: 1) size of government; 2) legal structure and security of property; 3) access to sound money; 4) freedom to trade internationally; and 5) regulation of credit, labour and business

This year's report also features new research by Jakob de Haan, Jan-Egbert Sturm and Eelco Zandberg, who examine the likely impact of the global recession on level of economic freedom. They looked at the banking crises that took place in Norway and Sweden during the 1990s. The study found that, in economically-difficult years, the short-term response of government to the global economic downturn will reduce economic freedom. However, over a longer time, economic freedom has a tendency to increase after a banking crisis. In the case of Norway and Sweden, the banking crisis did not distract the countries from continuing with their market-based reform policies.

This annual report is widely used by scholars and policy makers and is published by the Fraser Institute in cooperation with more than 70 independent institutes worldwide, a number of which are members of the Economic Freedom Network Asia (EFN Asia), which is an FNF partner organisation.

For more information on the Economic Freedom Network, data sets and previous EFW reports, please visit www.freetheworld.com

Dr. Gorawut Numnak is regional manager for economic freedom & human rights at the Friedrich Naumann Foundation’s regional office for Southeast & East Asia

Source: Economic Freedom Network (EFN) Asia

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