The latest Economic Freedom of the World: 2010 Annual Report, released today by the Fraser Institute in association with the Institute of Economic Affairs, ranks Britain as 10th 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 ranking remained the same).
Economic freedom is now on retreat around the world too. This year’s report shows that global economic freedom experienced its first global downturn in a quarter of a century, with the average score falling to 6.67 in 2008 (the most recent year for which data is available) from 6.74 in 2007. Of the 123 countries with economic freedom rankings dating back to 1980, 88 (71.5 per cent) saw their rankings decrease while only 35 (28.5 per cent) recorded increases.
Commenting on the report, Prof Philip Booth, Editorial Director of the Institute of Economic Affairs, said:
“Economic freedom is a prerequisite for prosperity. Britain needs to make sure that it keeps this vital principle at the heart of its policy-making. Coming out of the recession we need less red tape, lower government spending and government interference in the economy. If the private sector is to grow and provide employment for those who move out of the public sector businesses need freedom.”
The report ranks Hong Kong number one, followed by Singapore and New Zealand. Zimbabwe once again has the lowest level of economic freedom among the 141 jurisdictions included in the study, followed by Myanmar, Angola, and Venezuela.
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. This year’s report also contains new research showing the impact of the economic freedom on rates of unemployment and homicide.
The full report is available here.
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 6.02 from 6.29 in the last year’s report
• Legal structures and security of property rights: changed to 8.11 from 8.02
• Access to sound money: changed to 9.41 from 9.44
• Freedom to trade internationally: stayed constant at 7.63
• Regulation of credit, labour and business: changed to 7.76 from 7.82
It looks certain that our level of freedom, as measured by the index, will decrease for at least the next two years – whatever the coalition does.
Hong Kong maintains the highest level of economic freedom worldwide, with a score of 9.05 out of 10. The other top scorers are Singapore (8.70), New Zealand (8.27), Switzerland (8.08), Chile (8.03), the United States (7.96), Canada (7.95), Australia (7.90), Mauritius (7.82), and the United Kingdom (7.81).
The rankings and scores of other large economies include Taiwan, 22nd (7.48); Germany, tied with Japan and Kuwait in 24th (7.46); France, 35th (7.32); South Korea, tied with Sweden in 37th (7.28); Spain, tied with Iceland and Honduras in