Tuesday, July 26, 2016

From the Archives: Index of Economic Freedom shows global progress for 2015, while USA loses ground

Publisher's note: This article was originally published on Examiner.com on February 2, 2015. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site was scheduled to go dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

Index of Economic Freedom shows global progress for 2015, while USA loses ground

For 21 years, the Heritage Foundation and the Wall Street Journal have collaborated to publish the annual Index of Economic Freedom, a list ranking nearly every country in the world on the basis of various criteria like rule of law, regulations, corruption, and openness to investment.

The 2015 Index was released on January 27, and two days later, the Charlottesville Libertarian Examiner spoke by telephone to one of its compilers, Charlotte Florance, who is research associate for economic freedom in Africa and the Middle East at the Heritage Foundation.

In the interview, Florance explained that the Index “scores the metrics in four broad categories for every country in the world,” drawing on statistics gathered by the World Bank and other organizations.

Analytical categories
The four broad categories that the Index uses are, she said, “rule of law, government size, regulatory efficiency, and open markets.”

Those four categories are broken down further into sub-categories.

For instance, Florance explained, rule of law includes “property rights and freedom from corruption. Government size includes fiscal freedom and government spending. Regulatory efficiency includes business freedom, labor freedom, and monetary freedom. And then open markets include trade freedom, investment freedom, and financial freedom.”

This methodology, she continued, “covers a broad spectrum of the economies of countries around the world. Scores in each category are aggregated to create an overall score and then countries are ranked on that score.”

The rankings are then divided up among five additional categories: “free, mostly free, moderately free, mostly unfree, and repressed.”

The “repressed” category, she noted, refers to countries like Venezuela, Cuba, and Zimbabwe, “some of the most closed off economies in the world, with North Korea being the bottom of countries ranked.”

United States is 12
Florance noted that people are surprised to find out that the United States is not in the “free” category, and does not even have one of the ten most free economies in the world.

“The United States is actually twelfth,” she said, “in the mostly free category and it falls behind countries such as Hong Kong, Singapore, New Zealand, Chile, Canada, and even a very small African country, Mauritius.”

That last country, she explained, is “an island but still part of sub-Saharan Africa and it is actually ranked tenth – so a very tiny economy is actually ranked more free than the United States.”

In the past two decades, according to the annual Index of Economic Freedom, the world as a whole has become increasingly free. The United States is something of an exception in that it has become less free.

This year was the first year in seven years, Florance said, in which the United States “was bumped up slightly in its score.” While economic freedom has been declining here in the United States, she said, global economic freedom has been improving.

She cautioned, however, that “there are certain cases around the world where certain authoritarian regimes do certain things that hinder economic freedom.”

Florance noted how it is “a good message that in 21 years of measuring economic freedom, globally it's getting a lot better.”

She pointed to sub-Saharan Africa as “a region where, although you do have the most repressed economies in the world, there has been significant improvement over the past 21 years.”

Africa south of the Sahara, she said, “remains one of the leading regions in overall improvement year after year,” even though, she added, there is “still a lot to be done.”


Heritage Foundation's Matthew Spalding assesses the Calvin Coolidge revival
Amity Shlaes discusses significance of Calvin Coolidge at Heritage Foundation
Transportation policy 'unfocused,' says Heritage Foundation's Ronald Utt
Five reasons to be a libertarian
South African author Greg Mills offers solutions to African poverty

Original URL: http://www.examiner.com/article/index-of-economic-freedom-shows-global-progress-for-2015-while-usa-loses-ground

No comments: