Economic Freedom of the World: 2006 Annual Report

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About the Report

Economic Freedom of the World measures the degree to which the policies and institutions of countries are supportive of economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to compete, and security of privately owned property.

In new research published in this year’s report, economist William Easterly of New York University compares the impact of economic freedom and foreign aid on economic growth in the poorest nations. Demonstrating that foreign aid has no positive impact on economic growth in the poorest nations, Easterly’s research shows that economic freedom has a positive impact on prosperity and helping lift nations out of poverty.

The first Economic Freedom of the World report, published in 1996, was the result of a decade of research by a team which included several Nobel Laureates and over 60 other leading scholars in a broad range of fields, from economics to political science, and from law to philosophy. This is the 10th edition of Economic Freedom of the World. This year’s publication ranks 130 nations for 2004, the most recent year for which data are available.

About the Editors

James D. Gwartney is Professor of Economics and holds the Gus A. Stavros Eminent Scholar Chair at Florida State University, where he directs the Gus A. Stavros Center for the Advancement of Free Enterprise and Economic Education. He served as Chief Economist of the Joint Economic Committee of the US Congress during 1999/2000. He is the co‐​author of a leading textbook, Economics: Private and Public Choice, and a recently published primer, Common Sense Economics: What Everyone Should Know About Wealth and Prosperity (St. Martin’s Press, 2005). His professional publications have appeared in the American Economic Review, Journal of Political Economy, Industrial and Labor Relations Review, Cato Journal, Kyklos, and Southern Economic Journal. Prof. Gwartney was president of the Association of Private Enterprise Education and was awarded the association’s Adam Smith Award in 2004. His doctoral degree in economics is from the University of Washington and he is a member of the Mont Pelerin Society.

Robert A. Lawson is Professor of Economics and holds the George H. Moor Chair in the School of Management at Capital University in Columbus, Ohio. He earned his B.S. in economics from the Honors Tutorial College at Ohio University and his M.S. and Ph.D. in economics from Florida State University. Prof. Lawson has professional publications in Public Choice, Cato Journal, Kyklos, Journal of Labor Research, Journal of Institutional and Theoretical Economics, and the European Journal of Political Economy. He is a senior fellow with the Buckeye Institute for Public Policy Solutions, where he has written extensively on issues of state and local public finance. Lawson is a former president of the Association of Private Enterprise Education and is a member of the Mont Pelerin Society.

William Easterly is Professor of Economics at New York University (NYU), joint with Africa House, and Co‐​Director of NYU’s Development Research Institute. He is also a non‐​resident Fellow of the Center for Global Development in Washington, DC. William Easterly received his Ph.D. in Economics at MIT. He spent 16 years as a Research Economist at the World Bank. He is the author of The White Man’s Burden: How the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good (Penguin, 2006), The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics (MIT, 2001), three other co‐​edited books, and 46 articles in refereed economics journals. Prof. Easterly is an associate editor of the Quarterly Journal of Economics, the Journal of Economic Growth, and of the Journal of Development Economics. He was born in West Virginia and grew up in Bowling Green, Ohio.

Praise for Previous Editions

“The conclusion [of the economic freedom project] is abundantly clear: the freer the economy, the higher the growth and the richer the people. Countries that have maintained a fairly free economy for many years did especially well.”
The Economist

“Economic freedom advances economic growth, reduces poverty and promotes other civil and political freedoms. It is also a tonic against terrorism because of the opportunities it creates. All the nations behind global terrorism lack economic freedom.”
—Nobel Laureate Milton Friedman