The annual Economic Freedom of the World Report ranks countries on the level of economic freedom. This comprehensive index, constructed under the leadership of The Fraser Institute and Nobel Laureate Milton Friedmann, is the most objective and accurate measure of economic freedom published to date by any organization and the only one that uses reproducible measures appropriate for peer-reviewed research.
The 2007 annual report explores the evolution of economic freedom over the last quarter century and the impact of economic freedom on people’s lives. This year’s index includes a number of new components based on the World Bank’s Doing Business ratings. In the past year, more data has become available and, so, 11 new countries have been added to the 130 countries in last year’s index. They are: Angola, Bosnia and Herzegovina, Burkina Faso, Ethiopia, Kazakhstan, Kyrgyz Republic, Lesotho, Mauritania, Moldova, Montenegro, and Serbia.
The Economic Freedom Index of the World is based on the following five parameters:
a) Size of the Government
b) Legal Structure and Security of Property Rights
c) Access to Sound Money
d) Freedom to Trade Internationally
e) Regulation of Business, Credit and Labour
These broad categories are further divided into 42 sub-components, which measure the degree of economic freedom in 141 countries of the world.
The most economically free country in the World, as per the Index, is Hong Kong, scoring 8.9 points on a scale of 0-10. It is followed by Singapore (8.8), New Zealand (8.5), Switzerland (8.3), Canada, the US and the UK tied at fifth place with a rating of 8.1. Germany shares the 18th position together with El Salvador, Oman and Austria with a score of 7.6.
Factors like lower unemployment, higher per capita GDP, higher income for the poor characterize nations with high level of economic freedom.
India is ranked at 69th position with a score of 6.6 in the current Index ahead of China which is ranked 86th with a score of 6.3. Though, India has improved its score from 6.5 to 6.6, it has slipped from 60th position last year.
In addition to the country data tables, the publication also has a chapter on “The Spread of the Global Economic Freedom” by Russell S. Sobel and Peter T. Leeson.
The Indian reprint has been published by the Academic Foundation in collaboration with the Centre for Civil Society and the Friedrich Naumann – Stiftung für die Freiheit. The global launch of the international edition and the Indian edition were held in New-Delhi on September 4, 2007
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