Economic Freedom Of The World: 2007 Annual 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.

This year’s report notes that economic freedom remains on the rise. The average economic freedom score rose from 5.1 (out of 10) in 1980 to 6.6 in the most recent year for which data are available. Of the 102 nations with scores in 1980 and in the most recent index, 90 recorded improvements in their economic freedom score, and just nine saw a decline. In this year’s index, Hong Kong retains the highest rating for economic freedom, 8.9 out of 10, followed by Singapore, New Zealand, Switzerland, Canada, United Kingdom, and the United States.

Is capitalism contagious? If so, to what extent; and how does it spread? In new research published in this year’s report, Russell S. Sobel and Peter T. Leeson examine these questions empirically. They find that economic freedom does in fact spread, although not as strongly as might be suggested by the emphasis this idea has been given in US foreign policy. In the report, Sobel and Leeson discuss the implications of these results for foreign policy and offers some predictions about the future path, and spread, of global economic freedom.

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 11th edition of Economic Freedom of the World. This year’s publication ranks 141 nations for 2005, the most recent year for which data are available.

“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

By James Gwartney and Robert Lawson with the assistance of Joshua Hall.

With contributions from Russell S. Sobel & Peter T. Leeson

AUTHORS

James Gwartney holds the Gus A. Stavros Eminent Scholar Chair at Florida State University, where he directs the Stavros Center for the Advancement of Free Enterprise and Economic Education. He is a coauthor of Economics: Private and Public Choice (Cengage/South-Western Press), a widely used text on the principles of economics that is now in its twelfth edition. He is also a coauthor of an economics primer, Common Sense Economics: What Everyone Should Know about Wealth and Prosperity (St. Martin’s Press, 2005). His publications have appeared in both professional journals and popular media such as the Wall Street Journal and the New York Times. He served as Chief Economist of the Joint Economic Committee of the US Congress during 1999/2000. He was invited by the incoming Putin Administration in March 2000 to make presentations and have discussions with leading Russian economists concerning the future of the Russian economy. In 2004, he was the recipient of the Adam Smith Award of the Association of Private Enterprise Education for his contribution to the advancement of free-market ideals. He is the current President of the Southern Economic Association. His Ph.D. in economics is from the University of Washington.

Robert A. Lawson holds the Jerome M. Fullinwider Endowed Centennial Chair in Economic Freedom and is director of the O’Neil Center for Global Markets and Freedom at the Southern Methodist University (SMU) Cox School of Business. Prior to SMU, he taught at Auburn University, Capital University, and Shawnee State University. Professor Lawson has numerous professional publications in journals such as Public Choice, Cato Journal, Kyklos, Journal of Labor Research, Journal of Institutional and Theoretical Economics, and European Journal of Political Economy. He has served as president of the Association of Private Enterprise Education and is a member of the Mont Pelerin Society.

Joshua Hall is the Director of the Center for Free Enterprise and an Associate Professor of Economics at West Virginia University. Prior this position, he was the Elbert H. Neese, Jr. Professor of Economics at Beloit College and an economist for the Joint Economic Committee of the US Congress. Dr. Hall has published in numerous policy studies and professional publications, his research having appeared in journals such as the Atlantic Economic Journal, Cato Journal, Journal of Economic Education, and Journal of Labor Research.

CONTRIBUTORS

Russell S. Sobel is Professor of Economics and holder of the James Clark Coffman Distinguished Chair in Entrepreneurial Studies at West Virginia University. He has published over 75 books and articles, including a co-authored textbook on the principles of economics and a book on West Virginia’s policy reform entitled Unleashing Capitalism: Why Prosperity Stops at the West Virginia Border and How to Fix It. Dr. Sobel was the founding Director of the West Virginia University Entrepreneurship Center, and he serves on the advisory boards of five major professional and academic organizations. He has received numerous awards for both his teaching and research. His recent work has focused on FEMA reform, state-level economic freedom, and entrepreneurship.

Peter T. Leeson is the BB&T Professor for the Study of Capitalism at the Mercatus Center at George Mason University. Previously, he was a Visiting Fellow at Harvard University and the F.A. Hayek Fellow at the London School of Economics. Leeson is the author of nearly 40 academic journal articles, which have appeared in journals such as the Journal of Law and Economics, Journal of Legal Studies, Journal of Economic Behavior and Organization, Journal of Institutional and Theoretical Economics, and Public Choice. He is an Associate Editor of the Review of Austrian Economics and an Adjunct Scholar of the Mackinac Center for Public Policy. In 2007, Leeson won the Fund for the Study of Spontaneous Orders Prize for his work on the effectiveness of private-property anarchy.