1. Economic Freedom of the World: 2004 Annual Report
Fraser Institute
Policy Briefing
July 15
2004

2. THANK YOU FOR COMING!
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
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
Objective: find a way to measure economic freedom and explore the connection between it and other variables
20 year project
Led by Professor Milton Friedman, Rose Friedman and Michael Walker
Involved 100 of the world’s top scholars

4. What is The Economic Freedom of the World Index?
An annual compilation of data representing factors which make a country economically free
Authors: James Gwartney and Robert Lawson
A compendium of 38 government policies affecting economic freedom based on objective data or independent surveys
A ranking of 123 countries representing 91% of the world’s population according to the extent to which they permit their citizens to be economically free
Now a collaboration of Institutes in 62 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
Size of government and taxation
Private property and the rule of law
Soundness of Money
Trade regulation and tariffs
Regulation of business, labour and capital markets
Based entirely on objective or third party data from 123 countries

7. Talk about making a difference …

8. Member Institutes of Economic Freedom of the World Network
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
The Pathfinder Foundation, Sri Lanka
Romania Think Tank, Romania
Scientific Research Mises Center, Belarus
Society for Disseminating Economic Knowledge: "New Economic School-Georgia," Georgia
Szazadveg Policy Research Center, Hungary
TIGRA®, Austria
Timbro, Sweden
The Ukrainian Center for Independent Political Research, Ukraine
 D’Letzeburger Land, Luxembourg
The Institute for Development of Eco­nomics and Finance, Indonesia
Bureau d’Analyse d’Ingenierie et de Logiciels (BAILO), Ivory Coast
African Research Center for Public Policy and Market Process, Kenya
Albanian Center for Economic Research (ACER), Albania
Alternate Solutions Institute, Pakistan
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 Entrepreneurship and Economic Development (CEED), Montenegro
Center for Free Enterprise, Korea
Center for Politiske Studier, Denmark
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, Serbia
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

9. Sample of Press Coverage for
Fraser Institute’ Economic Freedom of the World 2003
Calgary Herald
Edmonton Journal
Globe and Mail
La Presse
National Post
Toronto Star
Ottawa Citizen
Ottawa Sun
Economist
Info Bae, Argentina
AFX-Asia
Asia Pulse (3 article)
ChannelnewsAsia
Bahamas Paper
Nassau Guardian
Nassau Tribune
Tribune, Bahamas
Barbados Advocate
People's Daily, China
South China Morning Post
Xinhua, China (3 articles)
La Republica, Costa Rica (2 articles)
Portafolio, Colombia
Economia, Costa Rica
La Nacion, Costa Rica
La Republica, Costa Rica
El Financiero, Ecuador
Baltic News, Europe
Deutsche Presse-Agentur
World Markets, Europe
Agence France Presse, France
(2 articles)
Focus, Germany
Frankfurter
Asia Times, Hong Kong
Factiva, Hong Kong
Hong Kong Imail
Inter Press Service News Agency,
Hong Kong
Hindu, India
Nationwide International News, India
Dong-a Ilbo, Korea
Hankook Ilbo, Korea
JoongAng Daily, Korea
Korea Times
Kukmin Daily, Korea
Kyunghyang Daily News, Korea
Maeil Business Newspaper,
Korea
Segye Times, Korea
Seoul Economic Daily
Yonhap News, Korea
La Sentinelle, Mauritius
L'Express, Mauritius
Business Story, New Zealand
Dominion Post, New Zealand (2 articles)
Evening Standard, New Zealand
National Business Review, New Zealand
(2 articles)
Nelson Mail, New Zealand
New Zealand Herald (3 articles)
News, New Zealand
Northern Advocate, New Zealand
Sunday Star Times, New Zealand
La Prensa, Panama
Panama America
Aaaii ii-ioaeiaio, Russia
Arehtctbo Muk, Russia
Hobocth Kutar, Russia
Danas, Serbia
Pregled, Serbia
Factiva, Taiwan
Central News Agency, Taiwan
London Times
Christian Science Monitor
Reforma

11. Introducing the 2004 Economic Freedom of the World Index Results

12. Overall Economic Freedom Index and the Top Ten
Source: The Fraser Institute.

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

14. Countries having significant improvement since 1970
Source: The Fraser Institute.

15. Countries having significant deterioration since 1970
Source: The Fraser Institute.

16. Overall Economic Freedom Index and the Bottom Ten
Source: The Fraser Institute.

17. Economic Freedom Over Time
Source: The Fraser Institute.

18. Economic Freedom in Canada

19. Size of Government and the Top Ten
Source: The Fraser Institute.

20. Size of Government and the Top Ten
Source: The Fraser Institute.

21. Legal System and Property Rights and the Top Ten
Source: The Fraser Institute.

22. Legal System and Property Rights, 2000 (High Income OECD Countries)
8th
Source: The Fraser Institute.

23. Legal System and Property Rights, 2002 (High Income OECD Countries)
14th
Source: The Fraser Institute.

24. Legal System and Property Rights and the Top Ten
Source: The Fraser Institute.

25. Judiciary Independence, 2000 (High Income OECD Countries)
7th
Source: The Fraser Institute.

26. Judiciary Independence, 2002 (High Income OECD Countries)
15th
Source: The Fraser Institute.

27. Judiciary Independence and the Top Ten
Source: The Fraser Institute.

28. Impartial Courts, 2000 (High Income OECD Countries)
7th
Source: The Fraser Institute.

29. Impartial Courts, 2002 (High Income OECD Countries)
21st
Source: The Fraser Institute.

30. Impartial Courts and the Top Ten
Source: The Fraser Institute.

31. Sound Money and the Top Ten
Source: The Fraser Institute.

32. Sound Money and the Top Ten
Source: The Fraser Institute.

33. Freedom to Trade Internationally and the Top Ten
Source: The Fraser Institute.

34. Freedom to Trade Internationally and the Top Ten
Source: The Fraser Institute.

35. Regulations and the Top Ten
Source: The Fraser Institute.

36. Regulations and the Top Ten
Source: The Fraser Institute.

37. Credit Market Regulations and the Top Ten
Source: The Fraser Institute.

38. Credit Market Regulations and the Top Ten
Source: The Fraser Institute.

39. Labor Market Regulations and the Top Ten
Source: The Fraser Institute.

40. Labor Market Regulations and the Top Ten
Source: The Fraser Institute.

41. Business Regulations and the Top Ten
Source: The Fraser Institute.

42. Business Regulations, 2000 (High Income OECD Countries)
8th
Source: The Fraser Institute.

43. Business Regulations, 2002 (High Income OECD Countries)
9th
Source: The Fraser Institute.

44. Business Regulations and the Top Ten
Source: The Fraser Institute.

45. Irregular Payments, 2000 (High Income OECD Countries)
6th
Source: The Fraser Institute.

46. Irregular Payments, 2002 (High Income OECD Countries)
17th
Source: The Fraser Institute.

47. Canada’s Score 2000 vs 2002 Selected Indicators
Source: The Fraser Institute.

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

49. The impact on economic growth and development

50. Income (per person) of the Bottom Ten
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
(Online).

51. Income (per person) of the Top Ten
Note that Luxembourg was not one of the top ten last year.
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
(Online).

52. Per Capita Income and Economic Freedom Quintile
Least Free …….. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
(Online).

53. Growth in Real GDP Per Capita and Economic Freedom Quintile
Least Free ……………..….. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
(Online).

54. New Research: Economic Freedom, Investment, and Growth

55. Regressions: Economic Freedom and the Productivity of Investment
Source: The Fraser Institute.

56. Regressions: Changes in Economic Freedom and Economic Growth
Source: The Fraser Institute.

57. Economic Freedom and Investment Per Worker, 1980-2000
Source: The Fraser Institute.

58. Economic Freedom and Total and Private Investment as a Share of GDP
Source: The Fraser Institute.

59. Economic Freedom and Growth in Per Capita GDP, 1980-2000
The previous slide indicates the same thing.
Source: The Fraser Institute.

60. Economic Freedom,the Poor, and Inequality

61. Human Poverty Index, 2001, and Economic Freedom Quintile
Least Free …………..…. Most Free
Sources: The Fraser Institute; United Nations Development Programmme, Human Development Indicators 2003 (Online),
(accessed on June 16, 2004).

62. Income Inequality, 1998-2002 Least Free …….. Most Free
Percent of income accruing to the
Least Free …….. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
(Online).

63. Income Share of the Poorest 10% and Economic Freedom
Least Free …….. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004 (Online).

64. Per Capita Income of Poorest 10% and Economic Freedom
Least Free …….. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
(Online).

65. Economic Freedom, Other Freedoms and Democracy

66. Economic Freedom Versus Corruption 10 =highly corrupt and 0 =highly clean
Least Free ………….. Most Free
Sources: The Fraser Institute; Transparency International, Corruption Perceptions Index 2003 (Online).

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

68. Economic Freedom and Political Rights ten representing the highest degree of political rights and zero the lowest
Least Free …… Most Free
Sources: The Fraser Institute; Freedom House, Freedom in the World Country Ratings, (Online).

69. Economic Freedom and Civil Liberties ten representing the highest degree of civil liberties and zero the lowest
Least Free …… Most Free
Sources: The Fraser Institute; Freedom House, Freedom in the World Country Ratings, 1973 to (Online).

70. The impact of Economic Freedom on the UN’s Human Development Index and other indicators of well-being

71. Human Development Index, 2001, and Economic Freedom Quintiles
Least Free ……………. Most Free
Sources: The Fraser Institute; United Nations Development Programmme, Human Development Indicators 2003 (Online), available at (accessed on June 15, 2004).

72. Life Expectancy at Birth and Economic Freedom Quintiles
Least Free ……………. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
(Online).

73. Infant Mortality and Economic Freedom Quintile
Least Free ………..…. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
(Online).

74. Adult Mortality (2000) and Economic Freedom Quintile
Adult mortality rate is the probability of dying between the ages of 15 and 60--that is, the probability of a 15-year-old dying before reaching age 60, if subject to current age-specific mortality rates between ages 15 and 60.
Least Free ………..…. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
(Online).

75. Economic Freedom and Labor force, children 10-14 (% of age group)
Least Free ……………. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
(Online).

76. Access to Essential Drugs, 1999, and Economic Freedom Quintiles
Least Free …………..Most Free
Sources: The Fraser Institute; United Nations Development Programmme, Human
Development Indicators 2002 (Online), available at
(accessed on June 17, 2004)

77. % of Population Using Improved Water Sources, 2000
Least Free …………….. Most Free
Sources: The Fraser Institute; The World Bank, World Development Indicators 2004
(Online).

78. Conclusions Economic Freedom spurs Increased prosperity for all
Poverty reduction
Other freedoms
Reduces Probability of War
Quality of life improvements
All this can be seen in today’s data and lessons from history

79. www.freetheworld.com www.fraserinstitute.ca