The Fraser Institute has put out its annual report on Economic Freedom of the World -- a score and rank measuring "the degree to which the policies and institutions of countries support economic freedom". It's basically a rundown of countries based on how much (or little) they embrace free trade, both domestically and abroad. The index is based on scores in five areas:
1) Size of government (taxes=bad)
2) Legal structure and security of property rights (secure=good)
3) Access to sound money (access=good)
4) Freedom to trade internationally (trade=good)
5) Regulation of credit, labor, and business (regulation=bad)
Hong Kong comes top (again), followed by the usual suspects: Singapore, New Zealand, Switzerland, Canada-UK-USA (three-way tie!), Estonia (who knew?), Australia, and Ireland. France and Italy tie for 52nd, for obvious reasons (part of a four-way tie with Jordan and the Czech Republic). There are few surprises in the order; economic freedom tracks roughly with GDP per capita, it would seem. Most of the countries in the bottom fifth of the sample are African, and in the bottom ten only Venezuela and Myanmar (Burma) are not on the continent.
Oh, and it's also dedicated to Milton Friedman!
So, after looking through this report, I wondered if anyone else does something similar. Turns out the Heritage Foundation, in conjunction with the Wall Street Journal, also have rankings out on Economic Freedom. A few differences (Iran scores much much lower in this ranking), but overall nothing too surprising until you get to the very bottom of the list. The worst country (out of 157) for economic freedom according to Heritage and WSJ is North Korea, with 3% freedom. That's right--3%. The next lowest is Cuba (sense a trend?) and even it gets 29.7% free. Sheesh. As Team America: World Police taught us, it's "ronery" at the bottom.
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So I actually heard that Estonia has a flat tax, and that this has been critical to their economic growth. I am not certain how much they incorporate tax rates into the index, but this might have something to do with their high ranking.
Naomi Klein does a good number on Friedman in her new book The Shock Doctrine: The Rise of Disaster Capitalism - there's a good video on it at YouTube http://www.youtube.com/watch?v=kieyjfZDUIc and more on her book on her site at http://www.naomiklein.org/shock-doctrine/the-book
The Fraser Institute is a joke and always has been (it's embarrassing to think I live in the same province as them) - a right wing corporate tool no more.
Well, Russia also has a flat tax rate... didn't help it that much, did it?
Mart Laar, prime minister of Estonia, had a lot to do with their economic success. I just ran into a website about Estonia the other day - it is a Documentary about Estonia's Singing Revolution: This will provide an in-depth look at Estonia.
http://singingrevolution.com
No, actually, it's not at all obvious why France and Italy, etc., tied at 52nd.
Why?