News Release

July 8, 2003

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Report: Wealthiest Nations Have Freest Economies
Cato Institute releases Economic Freedom of the World: 2003 Annual Report

WASHINGTON, D.C.--The Cato Institute, in conjunction with the Fraser Institute of Canada and more than 50 think tanks around the world, announces the release of the Economic Freedom of the World: 2003 Annual Report. This report uses the most recent data available to provide a ranking of 123 nations according to the degree of their economic freedom. This year, Hong Kong retains the highest rating for economic freedom, closely followed by Singapore at #2 and the United States at #3.

Using 38 separate variables for each country, the Report's authors, James Gwartney of Florida State University and Robert Lawson of Capital University, argue that the key ingredients of economic freedom are personal choice, voluntary exchange, freedom to compete and the protection of persons and property. Ian Vásquez, director of Cato's Project on Global Economic Liberty, said that "economic freedom is demonstrably good for the poor, who are far better off in economically free countries than in less free countries."

Some highlights of the Economic Freedom of the World: 2003 Annual Report:

New Zealand, the United Kingdom, Canada, Australia, Ireland, Switzerland, and the Netherlands round out the top 10 economies. The rankings of other large economies are Germany, 20; Japan, 26; Italy, 35; France, 44; Mexico, 69; India, 73; Brazil, 82; China, 100; and Russia, 112. The bottom five nations are Guinea-Bissau, Algeria, Zimbabwe, the Democratic Republic of the Congo and Myanmar.

The report shows that most economically unfree states are still in sub-Saharan Africa. However, Botswana, which has for a long time had a significantly higher level of economic freedom than other nations in the region, today enjoys a per capita GDP of US$3,950. A comparable figure in the rest of sub-Saharan Africa is US$564. In the 2003 report, Botswana has the 26th highest level of economic freedom, tied to eight other nations, including advanced nations like Japan and Norway.

“Freeing people economically unleashes individual drive and initiative and puts a nation on the road to economic growth,” Nobel laureate Milton Friedman says. “In turn, economic prosperity and independence from government promote civil and political liberty.”

The first Economic Freedom of the World report, published in 1996, was the result of over a decade's research by more than 100 leading scholars, including several Nobel laureates, in a broad range of fields, from economics to political science, from law to philosophy.