The Economic Freedom of the World Report is the most detailled and most important of its kind. It now “incorporates 42 different components (or sub-components) and uses them to measure how consistent the institutions and policies of 141 countries are with economic freedom. This report is now published annually by a network of institutes in more than 70 countries”. (For the different components see page 5).

You can download a free version of the 2008 edition (or its different chapters) on the Website of the Canadian Fraser Institute.

Beautiful small Hong Kong gets gold for economic freedom again. Watch a short video by the Fraser Institute paying tribute to the strongest of the asian tigers:

Celebrating the Miracle of Hong Kong

Here are some of the other important findings:

“The other top scorers are: Singapore (8.57), New Zealand (8.28), Switzerland (8.20), the United Kingdom (8.07), Chile (8.06), Canada (8.05), Australia (8.04), the United States (8.04), and Ireland (7.92).

The rankings (and scores) of other large economies are Germany, 17 (7.64); Taiwan, 18 (7.63), Japan, 27 (7.48); South Korea, 29 (7.42); Sweden, 33 (7.35); France, 45 (7.19); Italy, 49 (7.15); Mexico, 58 (6.98); India, 77 (6.59); China, 93 (6.29); Brazil, 96 (6.16); and Russia, 101 (6.12).

Several countries have substantially increased their ratings and become relatively freer during the past decade. Estonia increased its rating by 2.27 points since 1995 and is now one of the freest economies in the world. Lithuania and Latvia have increased their ratings by at least two points since 1995 and their 2006 ratings are greater than 7.0. The ratings of Cyprus, Hungary, Kuwait, and South Korea have also improved substantially and their ratings are now 7.3 or more. Two African economies, Zambia and Ghana, have become substantially freer with ratings of 7.13 and 7.04, respectively.

However, African nations also continue to occupy most of the spots at the bottom of the index with the lowest levels of economic freedom, joined by Venezuela and Myanmar. The 10 nations with the lowest levels of economic freedom are: Zimbabwe (2.67), Angola (4.10), Myanmar (4.19), the Republic of Congo (4.64), Niger (4.67), Venezuela (4.67), Guinea-Bissau (5.01), Central Africa Republic (5.01), Chad (5.12), Rwanda (5.23), and Burundi (5.23).”

Chapter 1: Find a list of all countries on page 8, the area rankings on page 9-12, and – most importantly – the graphs showing the connections between Economic Freedom and:

Income per Capita, Economic Growth, Foreign Direct Investment (page 18)

– Gross Capital Formation, Private Gross Capital Formation, Income Share of the Poorest 10 % (page 19)

Income Level of the Poorest 10 %, Life Expectancy, Corruption (page 20)

Political Rights, Civil Liberties, Environmental Performance (page 21)

Chapter 2 takes a closer look on world poverty and again finds a strong connection between poverty reduction and economic freedom:

“If economic freedom makes a difference, the mean poverty rates for the freer economies should be lower. This is indeed the case. The unweighted $1-per-day poverty rate was 32.1% in 2004 for countries with EFW ratings of less than 5, but only 11.7% for countries with EFW ratings between 6 and 7. The $1-per-day poverty rate for the middle group was between these two extremes. For the weighted means, the pattern of the $1-per-day poverty figures was similar. The $2-per-day poverty rate declines from 59.7% to 41.0% to 32.8% as one moves from the less free to the more free economies. In the case of the weighted means, the difference between the freer economies and the least-free group was smaller, but still substantial.” (page 29, for the graphs see page 28)

“In the mostly unfree economies, 72.6% of the population has access to safe water, compared to nearly 100% in the mostly free economies. The two middle groups fell between these two extremes. Given the centrality of clean water to health and well-being and the excessive caloric expenditures to obtain clean water, the impoverishing effect of this differential is highly noteworthy. Consider next, life expectancy at birth. As one moves from the mostly unfree to the middle groups and on then to the mostly free economies, life expectancy increases. The life expectancy of people in the mostly free group is slightly more than 20-years greater than for the mostly unfree group. For every 1,000 births on average, 64 more babies survive in freer economies per year than in the unfree economies. The gap in the rate for child mortality under age five is even greater, with an average of 109 more children per thousand surviving each year in economically free economies than for those that are mostly unfree. Similarly, there are more than twice as many physicians per 1,000 population in the mostly free economies than for those that are mostly unfree. Malnutrition affects more than a quarter of the population for the least-free economies but only a small fraction—approximately 2.5%—in the free economies. There is also a substantial difference between the free and unfree economies in the United Nations Human Poverty Index. The HPI increases from 63.9 for the mostly unfree to 93.7 for the mostly free economies with the middle groups again falling in between.” (page 29)