Economic Freedom Of The World 2008 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.

A global effort has been devoted to reducing world poverty. Some claim poverty can be best combated by foreign aid. Others point to the importance of domestic policies, such as those that support or weaken economic freedom. In new research published in this year’s report, Seth Norton and James Gwartney investigate the connection between economic freedom and poverty. Using various measures of poverty, Norton and Gwartney find a strong positive relationship between economic freedom and poverty reduction and call for more research in this area.

This year’s report notes that economic freedom remains on the rise. The average economic freedom score rose from 5.46 (out of 10) in 1980 to 6.65 in the most recent year for which data are available. Of the 102 nations with chain-linked scores going back to 1980, 89 saw an improved score and 13 saw a decrease. In this year’s index, Hong Kong retains the highest rating for economic freedom, 8.94 out of 10, followed by Singapore, New Zealand, Switzerland, United Kingdom, Chile, Canada, United States, Australia, and Ireland.

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 12th edition of Economic Freedom of the World. This year’s publication ranks 141 nations for 2006, 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

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.

CONTRIBUTOR

Seth Norton is Aldeen Professor of Business at Wheaton College. He holds a B.A. in history from Northwestern University, an M.B.A. in finance and industrial relations, and a Ph.D. in economics from the University of Chicago. Professor Norton has held teaching positions at Washington University, Illinois State University, and the University of Michigan. He has a broad teaching background, including economics, finance, marketing and strategy. Professor Norton’s research record is also diverse: he has published in comparative economic systems, development economics, industrial organization, finance, marketing, and strategic management. Publications include works in the Cato Journal, Economic Inquiry, Journal of Business, Journal of Corporate Finance, Journal of Economics & Management Strategy, Journal of Institutional and Theoretical Economics, Journal of Law & Economics, Marketing Science, and Strategic Management Journal. Professor Norton was recently elected to the Board of Directors of the Western Economics Association International. He is currently studying the links between economic institutions and human well-being across countries, the role of culture in framing economic institutions, the role of information in firm performance, and alternative theories of competition.