Hong Kong again topped the rankings of 151 countries and territories, followed by Singapore, New Zealand, and Switzerland in the Fraser Institute’s annual Economic Freedom of the World Report. The report measures the economic freedom (levels of personal choice, ability to enter markets, security of privately owned property, rule of law, etc.) by analyzing the policies and institutions of 157 countries and territories. Co-published by the Cato Institute, the Fraser Institute in Canada, and more than 70 think tanks around the world, this is the 18th edition of Economic Freedom of the World and this year’s publication ranks 151 nations for 2011, the most recent year for which data are available.
Global economic freedom increased modestly in this year’s report, though it remains below its peak level of 6.92 in 2007. After a global average drop between 2007 and 2009, the average score rose to 6.87 in 2011, the most recent year for which data is available. In this year’s index, Hong Kong retains the highest rating for economic freedom, 8.97 out of 10. The rest of this year’s top scores are Singapore, 8.73; New Zealand, 8.49; Switzerland, 8.30; United Arab Emirates, 8.07; Mauritius, 8.01; Finland, 7.98; Bahrain, 7.93; Canada, 7.93; and Australia, 7.88.
The United States, long considered the standard bearer for economic freedom among large industrial nations, has experienced a substantial decline in economic freedom during the past decade. From 1980 to 2000, the United States was generally rated the third freest economy in the world, ranking behind only Hong Kong and Singapore. After increasing steadily during the period from 1980 to 2000, the chain linked EFW rating of the United States fell from 8.65 in 2000 to 8.21 in 2005 and 7.74 in 2011. The chain-linked ranking of the United States has fallen precipitously from second in 2000 to eighth in 2005 to 19th in 2011 (unadjusted rating of 17th).
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).
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.