Index of Economic Freedom is a 376 page ($24.95) comprehensive guide to growth in 150 countries from Albania to Zimbabwe.
This is the second year that Slovenia is ranked. In USA call1-800-975-8625 to order.
The purpose of the annual Index of Economic Freedom, published for two years by the Heritage Foundation and with this fourth edition, now co-published by The Wall Street Journal, is to track international progress toward freer economies.
In doing so, we evaluate 10 key areas:
trade policy, taxation, government intervention, monetary policy, capital flows and foreign investment, banking policy, wage and price controls, property rights, regulation, and black market activity.
In ach of these 10 broad categories, we use more than 50 independent economic criteria to develop a snapshot of the level of economic freedom in each country. We present the data in separate chapters on each of 150 economies, in which the reader can find the corporate tax of Thailand, say, or the size of of the black market in Brazil, or how interest rates are set in Poland.
While there's value, we think, in gathering in one volume such often hard-to-obtain information, we see an even greater value in the cumulative message of our study. The index demonstrates unequivocally that countries with the highest levels of economic freedom also have the highest living standards. Similarly, countries with the lowest levels of economic freedom also have the lowest living standards. Though the index doesn't measure political freedom, we think there is a crucial link between it and economic freedom. It's no accident that the world's biggest offenders of human rights show up near the bottom of the Index of Economic Freedom.
A comparison of scores from the first and second editions of the index demonstrates an interesting phenomenon: Wealthy countries tend to reintroduce restrictions on economic freedom over time. As they become rich, countries begin adding extensive welfare and other social programs that were not affordable when they were poorer. Protecting the people whom rapid economic growth has left behind is important, but in Europe in particular it has been carried to levels that impede growth and depress living standards.
Thus, after they have become economically "liberated," countries like Germany and France tend to fall back down the scale of economic freedom, getting worse scores than newly emerging free economies like Hong Kong, Taiwan or Singapore. These Asian tigers are still growing and developing, and may be just beginning to restrict their economies with post-industrial welfare and environmental policies. But the example of some richer nations shows that economic freedom can rise and fall, and that the fruits of success can carry the seeds of destruction.
Switzerland is the economically freest country in Europe.