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The Policy Habits of Economically Successful Countries.

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Presentation on theme: "The Policy Habits of Economically Successful Countries."— Presentation transcript:

1 The Policy Habits of Economically Successful Countries

2 Lessons for Turkey from Policies around the world Fraser Institute Program to measure 41 specific policies in 152 countries Objective to see what is the pattern of policies followed by the most successful countries Every policy examined is given a grade out of ten Turkey’s policy score is then compared to the other 151 countries

3 Why Should Turks care about how their policies rank? Because Countries whose policies earn them a high policy rank also achieve better Economic and Social outcomes.

4 The World’s Top Ten Policy Makers Source: The Fraser Institute.

5 The Bottom Ten Policy Makers Source: The Fraser Institute.

6 The impact of Policy on Prosperity and Development

7 Per Capita Income and Policy Score Quartile Sources: The Fraser Institute; The World Bank, World Development Indicators, 2013

8 Income of the Poorest 10% and Policy Score Sources: The Fraser Institute; The World Bank, World Development Indicators, 2013.

9 Policy Score and Political Rights Sources: The Fraser Institute; Freedom House, Freedom in the World Country Ratings, 2012, available at http://www.freedomhouse.org/.

10 Policy Score and Civil Rights Sources: The Fraser Institute; Freedom House, Freedom in the World Country Ratings, 2012, available at http://www.freedomhouse.org/.

11 Policy Score and Corruption High scores indicate low corruption Sources: The Fraser Institute; Transparency International, Corruption Perceptions Index, 2014 available at http://www.transparency.org.

12 Policy Score and Life Satisfaction Sources: The Fraser Institute; Happy Planet Index 2014

13 Literacy (% of population) Male Female Sources: The Fraser Institute; World Development Indicators 2013

14 Policy Score and Life Expectancy at Birth Sources: The Fraser Institute; The World Bank, World Development Indicators, 2013.

15 What is the connection between Policy and growth? What is measured as economic growth consists of : Real Cost Reduction – getting the same output for less real cost through innovation The extension of existing real cost technology to new members of the population or new regions The movement of workers within a country to sectors that have higher productivity – China for example

16 Real Cost Reduction In most cases, the real cost reduction that produces growth involves the reduction or elimination of some person’s income! The losers contrive to use the policies of government to protect their incomes. If they are successful the policies we observe will be anti-growth More importantly the policies will be hostile to entrepreneurs because entrepreneurs bring the real cost reducing innovations

17 Policy Evaluation is a comparative process While we can conceive of “ideal” policies the real world is never ideal Practically speaking entrepreneurs and capital gravitate to the best available policy environment So the question is how does Moldova’s policy apparatus compare to everybody else’s?

18 Turkey's Ranking 71/152 TurkeyTop TenTurkeyTop Ten Turkey's Policies compared to 152 CountriesRankMedianRankMedian 1A Government Consumption60694Ai Revenue from trade taxes (% of trade sector)4610 1B Transfers and subsidies105894Aii Mean tariff rate9014 1C Government enterprises and investment3414Aiii Standard deviation of tariff rates14524 1Di Top marginal income tax rate81414Bi Non-tariff trade barriers9324 1Dii Top marginal income and payroll tax rate33 4Bii Compliance costs of importing and exporting4917 2A Judicial independence81164C Black market exchange rates11 2B Impartial courts52124Di Foreign ownership/investment restrictions8423 2C Protection of property rights47114Dii Capital controls8821 2D Military interference in rule of law and politics122314Diii Freedom of foreigners to visit140 2E Integrity of the legal system64135Ai Ownership of banks1061 2F Legal enforcement of contracts32275Aii Private sector credit3931 2G Regulatory restrictions on the sale of real property41425Aiii Interest rate controls/negative real interest rates11 2H Reliability of police7875Bi Hiring regulations and minimum wage9232 2I Business costs of crime71225Bii Hiring and firing regulations5860 3A Money growth124865Biii Centralized collective bargaining3018 3B Standard deviation of inflation66585Biv Hours Regulations561 3C Inflation: Most recent year127635Bv Mandated cost of worker dismissal1241 3D Freedom to own foreign currency bank accounts115Bvi Conscription1161 5Ci Administrative requirements6817 5Cii Bureaucracy costs74123 5Ciii Starting a business4113 5Civ Extra payments/bribes/favoritism4815 5Cv Licensing restrictions7429 5Cvi Tax compliance7817

19 Turkey’s Particular Strength: Population Growth

20 Demographic Indicators1995200520152025 Population Midyear population (in thousands) 61,94 0 72,67 4 82,52 3 90,49 8 Growth rate (percent)1.71.51.10.8 Fertility Total fertility rate (births per woman)2.82.32.11.9 Crude birth rate (per 1,000 population)24201714 Births (in thousands)1,4581,4591,3621,265 Mortality Life expectancy at birth (years)68717476 Infant mortality rate (per 1,000 births)47302115 Under 5 mortality rate (per 1,000 births)58362517 Crude death rate (per 1,000 population)7667 Deaths (in thousands)414448506595 Migration Net migration rate (per 1,000 population)1100 Net number of migrants (in thousands)32473626

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23 EU Demographics 2014

24 www.freetheworld.com www.fraserinstitute.org

25 Personal Remittances % of GDP 2012 Tajikistan47.50% Kyrgyz Republic30.75% Nepal24.96% Moldova24.52% Lesotho23.80% Haiti20.43% Armenia19.23% Guyana16.46% El Salvador16.42% Lebanon16.01% Honduras15.73% Gambia, The15.42% Jamaica14.50% Bangladesh12.17% Jordan11.25% Georgia11.17% Bosnia and Herzegovina10.94% Sri Lanka10.10%

26 Demographic Overview - Custom Region - Russia Demographic Indicators1995200520152025 Population Midyear population (in thousands)148,758143,320142,424140,139 Growth rate (percent)0-0.50-0.3 Fertility Total fertility rate (births per woman)1.3 1.6 Crude birth rate (per 1,000 population)910129 Births (in thousands)1,3641,4581,6521,244 Mortality Life expectancy at birth (years)65667073 Infant mortality rate (per 1,000 births)181176 Under 5 mortality rate (per 1,000 births)221497 Crude death rate (per 1,000 population)15161413 Deaths (in thousands)2,2032,3051,9501,850 Migration Net migration rate (per 1,000 population)5122 Net number of migrants (in thousands)768163241


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