1 Economic Freedom of the World: Annual Report 2003 Economic Freedom of the World: Annual Report 2003 n Fraser Institute Policy Briefing n Toronto n July 8 n 2003

2 THANK YOU FOR COMING! n The key to changing policy in the world is changing the climate of opinion about what works and what does not work in encouraging world development n The key to changing the climate of opinion is providing the widest possible audience with good information about the causes of development and under-development

3 Economic Freedom of the World Project n Objective: find a way to measure economic freedom and explore the connection between it and other variables n 18 year project n Led by Professor Milton Friedman, Rose Friedman and Michael Walker n Involved 100 of the worlds top scholars

4 What is The Economic Freedom of the World Index? u An annual compilation of data representing factors which make a country economically free u Authors: James Gwartney and Robert Lawson u A compendium of 38 government policies affecting economic freedom based on objective data or independent surveys u A ranking of 123 countries representing 91% of the worlds population according to the extent to which they permit their citizens to be economically free u Now a collaboration of Institutes in 59 different countries

5 What is Economic Freedom Individuals have economic freedom when property they acquire without the use of force, fraud, or theft is protected from physical invasions by others and they are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others. An index of economic freedom should measure the extent to which rightly acquired property is protected and individuals are engaged in voluntary transactions. James Gwartney et al. 1996

6 Components of The Economic Freedom of the World Index n Size of government and taxation n Public versus private ownership n Private property and the rule of law n Trade regulation and tariffs n Foreign exchange and inflation n Controls on asset sales to foreigners n Based entirely on objective or third party data from 123 countries

Talk about making a difference …

8 African Research Center for Public Policy and Market Process, Kenya Albanian Center for Economic Research (ACER), Albania Association for Liberal Thinking, Turkey Association pour la Liberté Economique et le Progrès Social (ALEPS), France Cato Institute, United States of America Center for the Dissemination of Economic Knowledge (CEDICE), Venezuela Center for Free Enterprise, Korea Center for Policy Research, Sri Lanka The Center for Research and Communication, Philippines Centre for Civil Society, India Centre for the New Europe, Belgium Centro Einaudi, Italy Centro de Investigación para el Desarrollo A.C., Mexico Centro de Investigación y Estudios Legales (CITEL), Peru Centro de Investigaciones Económicas Nacionales, Guatemala Centrum im. Adama Smitha, Poland The Estonian Institute for Open Society Research, Estonia The F.A. Hayek Foundation, Slovak Republic The Fraser Institute, Canada Free Market Centre, Yugoslavia The Free Market Foundation of Southern Africa, South Africa Fundación DL, Colombia Fundación Economía y Desarrollo, Inc., Dominican Republic Fundación Libertad, Argentina Fundación Libertad, Panamá Fundación Libertad, Democracia y Desarrollo, Bolivia Hong Kong Centre for Economic Research, Hong Kong Institute for Advanced Strategic and Political Studies, Israel Institute for Market Economics, Bulgaria Institute of Business, Trinidad and Tobago The Institute of Economic Affairs, Ghana The Institute of Economic Affairs, United Kingdom Institute of Economic Analysis, Russia Institute of Economic Studies, Iceland The Institute of Economics, Croatia Institute of Public Affairs, Australia Institute of Public Policy Analysis, Nigeria Instituto Ecuatoriano de Economía Política, Ecuador Instituto Liberal do Rio de Janeiro, Brazil Instituto Libertad y Desarrollo, Chile Instituto para la Libertad y el Análisis de Políticas, Costa Rica Liberales Institut, Germany Liberales Institut, Switzerland Liberální Institut, Czech Republic Lithuanian Free Market Institute, Lithuania Making Our Economy Right (MOER), Bangladesh The Nassau Institute, Bahamas The New Zealand Business Roundtable, New Zealand Open Republic Institute, Ireland Szazadveg Policy Research Center, Hungary TIGRA®, Austria Timbro, Sweden The Ukrainian Center for Independent Political Research, Ukraine DLetzeburger Land, Luxembourg DLetzeburger Land, Luxembourg The Institute for Development of Eco­ nomics and Finance, Indonesia Liberty Network (LINE), Denmark Liberty Institute, Romania Bureau dAnalyse dIngenierie et de Logiciels (BAILO), Ivory Coast Member Institutes of Economic Freedom of the World Network

9 Sampling of Press Coverage Economic Freedom of the World 2002 · Peoples Daily (China) · The BBC World Service · Financial Times of London · CNN · The Daily Star, (Dhaka, Bangladesh) · Frankfurter Allgemeine Zeitung · Investor's Business Daily · The Economist · Business Week · Agence France-Presse (4 articles) · ITAR-TASS · Notimex · DPA (German Press Agency) · Jiji Press · Sing Tao Daily (China) · Kyodo News · Xinhua · Japan Economic Newswire · Inter Press Service · Press Trust of India · National Post, (Canada) · Ottawa Citizen (Canada) · Bloomberg TV · Reuters · South China Morning Post (2 articles) · New Zealand Herald · Hindustan Times · CNN en Espanol · White House Bulletin · Pravda · Reforma (Mexico) · El Diario (Chile) · Singapore Business Times · Komersant (Russia) · Vedomosti (Russia) · La Nacion (Costa Rica) · La Republica (Costa Rica) · Corporate Mexico · Asia Pulse · Asia Times · AsiaPort · Daily News Asia · T he Christian Science Monitor · Radio Free Europe · Radio Free Asia · SBS Broadcasting (Australia) · Chinese Radio (US) · El Comercio, Ecuador · El Financiero, Ecuador · Latin Trade, Florida · Economia, Portugal · Público, Portugal · United Press International · BNS, Lithuania · Lietuvos Aidas, Lithuania · Respublika, Lithuania · Lietuvos Televizija (Lithuania) · Znad Wilii, Poland · Irish Times · Globe and Mail (Canada) · Times Banks & Exchanges (Russia)

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11 Introducing the 2003 Economic Freedom of the World Index Results

12 The top ten and how they got there Source: The Fraser Institute.

13 Countries with significant deterioration since 1970 Source: The Fraser Institute.

14 Why is Economic Freedom Important? n Economic rights are fundamental rights in the sense that without them there can be no political freedom or civil freedoms n They are a prerequisite for growth and development n They are a prerequisite for broader human development

15 The impact on economic growth and development

16 Income (per person) of the Bottom Ten Sources: The Fraser Institute; The World Bank, World Development Indicators 2003 (Online). (Online).

17 Income (per person) of the Top Ten Sources: The Fraser Institute; The World Bank, World Development Indicators 2003 (Online). (Online).

18 Per Capita Income and Economic Freedom Quintile Least Free …….. Most Free Sources: The Fraser Institute; The World Bank, World Development Indicators 2003 (Online).

19 Growth in Real GDP Per Capita and Economic Freedom Quintile Least Free ……………..….. Most Free Sources: The Fraser Institute; The World Bank, World Development Indicators 2003 (Online). (Online).

Economic Freedom, the Poor, and inequality

21 Human Poverty Index and Economic Freedom Quintile Least Free …………..…. Most Free Sources: The Fraser Institute; United Nations Development Programmme, Human Development Indicators 2002 (Online).

22 Income Inequality, Least Free …….. Most Free Percent of income accruing to the Sources: The Fraser Institute; The World Bank, World Development Indicators 2003 (Online). (Online).

23 Per Capita Income of poorest 10% and Economic Freedom Least Free …….. Most Free Sources: The Fraser Institute; The World Bank, World Development Indicators 2003

24 As the worlds eyes again turn to Africa … Economic Freedom Making a Difference An Example…

25 Economic Freedom in Botswana, and Sub- Sahara Africa

26 Average Per Capita GDP

27 Economic Freedom, Other Freedoms and Democracy

28 Economic Freedom Versus Corruption Least Free ………….. Most Free Sources: The Fraser Institute; Transparency International, Corruption Perceptions Index 2002 (Online).

29 Political Stability and Economic Freedom Quintile Least Free ………..… Most Free

30 Economic and Political Freedom Least Free …… Most Free Sources: The Fraser Institute; Freedom House, Freedom in the World Country Ratings, to (Online).

31 Economic and Civil Freedom Least Free …… Most Free Sources: The Fraser Institute; Freedom House, Freedom in the World Country Ratings, to (Online).

32 The impact of Economic Freedom on the UNs Human Development Index and other indicators of well-being

33 Human Development Index, 2000, and Economic Freedom Quintiles Least Free ……………. Most Free Sources: The Fraser Institute; United Nations Development Programmme, Human Development Indicators 2002 (Online).

34 Infant Mortality and Economic Freedom Quintile Least Free ………..…. Most Free Sources: The Fraser Institute; The World Bank, World Development Indicators 2003 (Online). (Online).

35 Economic Freedom and Labor force, children (% of age group), 2001 Least Free ……………. Most Free Sources: The Fraser Institute; The World Bank, World Development Indicators 2003 (Online). (Online).

36 Access to Essential Drugs, 1999, and Economic Freedom Quintiles Least Free …………..Most Free Sources: The Fraser Institute; The World Bank, World Development Indicators 2002 (CD-ROM).

37 % of Population Using Improved Water Sources, 2001 Least Free …………….. Most Free Sources: The Fraser Institute; The World Bank, World Development Indicators 2003 (Online). (Online).

38 Life Expectancy at Birth, 2001, and Economic Freedom Quintiles Least Free ……………. Most Free Sources: The Fraser Institute; The World Bank, World Development Indicators 2003 (Online). (Online).

39 Conclusions Economic Freedom spurs n Increased prosperity for all n Poverty reduction n Other freedoms n Quality of life improvements All this can be seen in todays data and lessons from history

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