The latest Economic Freedom of the World: 2011 Annual Report, released today by the Fraser Institute in association with the Institute of Economic Affairs, ranks Britain as 8th in the index. Economic freedom in Britain has been on retreat since 2000 and Britain’s score fell again in this year’s report (though Britain’s overall ranking actually rose from 10th last year).
Overall, levels of economic freedom decreased around the globe. This year’s report shows that the average economic freedom score fell to 6.64 in 2009 (the latest year for which figures are available), the lowest in nearly three decades, from 6.67 in 2008.
Commenting on the report, Prof Philip Booth, Editorial Director of the Institute of Economic Affairs, said:
“In response to the American and European debt crises, governments around the world are embracing perverse regulations and this has huge, negative implications for economic freedom and financial recovery.
“The link between economic freedom and prosperity is undeniable: the countries that score highly in terms of economic freedom also offer their people the best quality of life. It is no coincidence that the US is finding itself with European levels of unemployment with economic freedom dropping so rapidly there. The UK must deregulate to increase economic freedom and growth.”
The report ranks Hong Kong number one, followed by Singapore and New Zealand – the same rankings as last year. Zimbabwe once again has the lowest level of economic freedom among the 141 jurisdictions included in the study, followed by Myanmar, Venezuela and Angola.
The United States experienced one of the largest drops in economic freedom, falling to 10th place overall from sixth in 2010. Much of this decline is a result of higher spending and borrowing on the part of the U.S. government, and lower scores for legal structure and property rights.
Research shows that individuals living in countries with high levels of economic freedom enjoy higher levels of prosperity, greater individual freedoms, and longer life spans. Nations in the top quartile of economic freedom had an average growth in per-capita GDP between 1990 and 2009 of 3.07%, compared to 1.18% for those nations in the bottom quartile, in constant 2005 international dollars. Life expectancy is 79.4 years in the top quartile compared to 60.7 years in the bottom quartile.
The full report is available at www.freetheworld.com
UK scores in key components of economic freedom (from 1 to 10 where a higher value indicates a higher level of economic freedom):
- Size of government: changed to 5.68 from 6.02 in the last year’s report
- Legal structures and security of property rights: changed to 8.20 from 8.11
- Access to sound money: changed to 9.58 from 9.41
- Freedom to trade internationally: changed to 7.68 from 7.63
- Regulation of credit, labour and business: changed to 7.40 from 7.76
Hong Kong retains the highest rating for economic freedom worldwide, with a score of 9.01 out of 10. The ot