2
Economic Freedom of the World - Economic Freedom of the World - The Role of Government in the The Role of Government in the Modern Growth EconomyModern Growth Economy
Presentation toPresentation to Institute X Institute X LOCATIONLOCATION DATEDATE PRESENTERPRESENTER PRESENTING InstitutePRESENTING Institute
3
What causes Economic Success?What causes Economic Success? What are the practices of economically What are the practices of economically
successful countries and regions?successful countries and regions? How can countries and provinces achieve How can countries and provinces achieve
success and avoid failuresuccess and avoid failure What are the implications of successful What are the implications of successful
strategies?strategies?
The crucial questions for economic The crucial questions for economic managementmanagement
Why do some countries succeed Why do some countries succeed and others fail?and others fail?
5
A Tale of Two CountriesA Tale of Two Countries
Hong Kong and VenezuelaHong Kong and Venezuela From poor to richFrom poor to rich From rich to poorFrom rich to poor
6
Hong Kong and Venezuela…1950Hong Kong and Venezuela…1950
0
1000
2000
3000
4000
5000
U.S.Dollars
perperson
Hong Kong
Venezuela
7
Hong Kong and Venezuela todayHong Kong and Venezuela today
0
5000
10000
15000
20000
25000
U.S.Dollars
perperson
Hong Kong
Venezuela
8
Hong Kong and Venezuela Hong Kong and Venezuela comparedcompared
0 5000 10000 15000 20000 25000 30000
Income per person
Venezuela 1950
Venezuela Today
Hong Kong 1950
Hong Kong Today
9
Hong Kong and Venezuela Hong Kong and Venezuela population growth 1950 - presentpopulation growth 1950 - present
0 1 2 3 4 5
Population Multiple relative to 1950
Venezuela
Hong Kong
10
What differences caused Hong What differences caused Hong Kong to become Rich and Kong to become Rich and Venezuela to become Poor?Venezuela to become Poor?
Population - evidently notPopulation - evidently not Natural Resources - not likelyNatural Resources - not likely Ability to afford infrastructure - certainly not Ability to afford infrastructure - certainly not Policy differences - a possible source of the Policy differences - a possible source of the
differencedifference
11
The Attitude of Success…economic The Attitude of Success…economic freedom in Hong Kong and freedom in Hong Kong and VenezuelaVenezuela
0
2
4
6
8
10
1970 1999
Venezuela
Hong Kong
12
Hong Kong’s Freedom Advantage Hong Kong’s Freedom Advantage over Venezuelaover Venezuela
0
10
20
30
40
50
60
Per
cen
tag
e ad
van
tag
e
1970 1999
13
The story of Hong Kong and The story of Hong Kong and Venezuela is repeated around the Venezuela is repeated around the globeglobe
Motivated the creation of the Economic Motivated the creation of the Economic Freedom of the World Project to examine Freedom of the World Project to examine whether there were empirical regularities that whether there were empirical regularities that could be found between economic freedom could be found between economic freedom and other characteristics of societies and other characteristics of societies including economic growth and development including economic growth and development
14
Economic Freedom of the World Economic Freedom of the World ProjectProject
15 year project examining policies of 15 year project examining policies of successful and unsuccessful regionssuccessful and unsuccessful regions
Led by Professor Milton Friedman, Rose Led by Professor Milton Friedman, Rose Friedman and Michael WalkerFriedman and Michael Walker
Involved 60 of the worlds top economists, Involved 60 of the worlds top economists, four of whom received the Nobel Prizefour of whom received the Nobel Prize
Objective: find a way to measure economic Objective: find a way to measure economic freedom and explore the connection freedom and explore the connection between it and other attributesbetween it and other attributes
15
What does Economic FreedomWhat does Economic FreedomMean?Mean?
The right to pursue voluntary acts of trade The right to pursue voluntary acts of trade and exchange without interference by and exchange without interference by government or others via force or fraudgovernment or others via force or fraud
The ability to access an impartial judiciary for The ability to access an impartial judiciary for the enforcement of property rights the enforcement of property rights
The right of citizens to keep the majority of The right of citizens to keep the majority of the income they earnthe income they earn
16
What is the Index of Economic What is the Index of Economic Freedom?Freedom?
An attempt to identify the factors which make An attempt to identify the factors which make a country economically freea country economically free
A compendium of 21 freedom factors based A compendium of 21 freedom factors based on objective data or independent surveyson objective data or independent surveys
A ranking of 123 countries according to the A ranking of 123 countries according to the extent to which they are freeextent to which they are free
Now a collaboration of 55 Institutes in 55 Now a collaboration of 55 Institutes in 55 different countriesdifferent countries
17
The Index measures 21 factorsThe Index measures 21 factors which are practical indicatorswhich are practical indicators of the extent to which consentingof the extent to which consenting adults can engage in adults can engage in Capitalist Acts. Capitalist Acts.
It is the broadest, most objective It is the broadest, most objective measure of economic freedom measure of economic freedom ever constructed.ever constructed.
18
19
The components of The Economic The components of The Economic Freedom IndexFreedom Index
Size of GovernmentSize of Government Structure of the EconomyStructure of the Economy Monetary and Price StabilityMonetary and Price Stability Freedom to Use Alternative CurrenciesFreedom to Use Alternative Currencies Legal Structure and Property RightsLegal Structure and Property Rights International ExchangeInternational Exchange Freedom of Exchange in Capital MarketsFreedom of Exchange in Capital Markets
20
The Top ElevenThe Top Eleven
7.6 7.8 8.0 8.2 8.4 8.6 8.8 9.0 9.2 9.4 9.6
Hong Kong
Singapore
New Zealand
United Kingdom
United States
Australia
Ireland
Switzerland
Luxembourg
Netherlands
Argentina
21
The Next TenThe Next Ten
7.7 7.8 7.9 8.0 8.1 8.2 8.3 8.4
Bolivia
Canada
Finland
Austria
Chile
Denmark
Germany
Iceland
Belgium
El Salvador
22
How does Canada’s level of How does Canada’s level of Economic Freedom compare with Economic Freedom compare with the ten most free countries and the ten most free countries and with NAFTA trading partners? with NAFTA trading partners?
23
Canada and the Top Ten Average
3 4 5 6 7 8 9 10
Size of Government
Structure of the Economy
Monetary Policy
Alternative Currencies
Legal Structure/Property Rights
International Exchange
Capital and Financial Markets
Total
Score (out of 10)
Canada Average of Top Ten
24
The United States, Canada and Mexico
3 4 5 6 7 8 9 10
Size of Government
Structure of the Economy
Monetary Policy
Alternative Currencies
Legal Structure/Property Rights
International Exchange
Capital and Financial Markets
Total
Score (out of 10)
Canada United States Mexico
25
Economic Freedom Spectrum
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
26
World Average: Economic World Average: Economic FreedomFreedom
6.2
5.35.2
5.3
5.5
6.2
6.4
5.0
5.5
6.0
6.5
1970 1975 1980 1985 1990 1995 1999
27
World Average: Economic World Average: Economic Freedom, adjusted for populationFreedom, adjusted for population
5.98
5.31
5.7 5.696.05
6.576.87
3.8
4.3
4.8
5.3
5.8
6.3
6.8
7.3
1970 1975 1980 1985 1990 1995 1999
Countries with ranks in 1970
28
World Average: Government World Average: Government Consumption as a Percentage of Consumption as a Percentage of GDPGDP
16
16.5
17
17.5
18
18.5
19
19.5
20
1970 1975 1980 1985 1990 1995 1999
29
World Average: Transfers as a World Average: Transfers as a percentage of GDPpercentage of GDP
0
2
4
6
8
10
12
1970 1975 1980 1985 1990 1995 1999
30
World Average: Publicly owned World Average: Publicly owned assets as a percentage of GDPassets as a percentage of GDP
0
10
20
30
40
50
1970 1975 1980 1985 1990 1995 1999
31
World Average: Existence of Price World Average: Existence of Price ControlsControls
0
1
2
3
4
5
6
7
8
1970 1975 1980 1985 1990 1995 1997 1999
32
World Average: Right to own World Average: Right to own Foreign CurrencyForeign Currency
0
2
4
6
8
10
1970 1975 1980 1985 1990 1995 1997 1999
33
World Average: Right to Own World Average: Right to Own Private PropertyPrivate Property
0
2
4
6
8
10
1970 1975 1980 1985 1990 1995 1999
34
World Average: Tariff RateWorld Average: Tariff Rate
0
20
40
60
80
100
120
1970 1975 1980 1985 1990 1995 1999
35
World Average: Private Ownership World Average: Private Ownership of Banksof Banks
0
20
40
60
80
100
1970 1975 1980 1985 1990 1995 1999
36
World Average: Right to have World Average: Right to have Capital Transactions with Capital Transactions with Foreigners Foreigners
0
2
4
6
8
10
1970 1975 1980 1985 1990 1995 1999
37
Population of the world, by Population of the world, by economic freedom ratingeconomic freedom rating
Rating (1999) Population (%)9.0-10.0 9,850,700 0.18%8.0-8.99 458,362,700 8.18%7.0-7.99 651,094,287 11.62%6.0-6.99 716,439,060 12.79%5.0-5.99 2,619,445,230 46.76%4.0-4.99 605,938,700 10.82%3.0-3.99 175,429,000 3.13%2.0-2.99 78,138,000 1.39%1.0-1.99 44,464,000 0.79%0.0-0.99 - 0.0%Unrated countries 490,646,634 8.76%
38
The top ten and how they got thereThe top ten and how they got there
1
6
11
16
21
26
31
Rank
Hong KongSingaporeNew ZealandUnited KingdomUnited StatesAustraliaIrelandSwitzerlandLuxembourgNetherlands
39
Some Asian CountriesSome Asian Countries
1
21
41
61
81
101
121
1970 1975 1980 1985 1990 1995 1999
Ran
k
Japan
Malaysia
Indonesia
Taiwan
China
40
Countries which have increased or Countries which have increased or decreased the level of Economic decreased the level of Economic FreedomFreedom
41
Countries having significant Countries having significant improvement since 1970improvement since 1970
1
21
41
61
81
101
121
1970 1975 1980 1985 1990 1995 1999
Rank
Chile
Peru
Argentina
Philippines
Portugal
United Kingdom
New Zealand
Ireland
Mauritius
42
Countries with significant Countries with significant deterioration since 1970deterioration since 1970
1
21
41
61
81
101
121
RANK
Venezuela, Rep.
Madagascar
Syria
Congo, Dem. R.
Nigeria
Pakistan
South Africa
Brazil
Colombia
Iran
43
The Race Toward Capitalism in the Eastern The Race Toward Capitalism in the Eastern and Former Soviet Transitional Economiesand Former Soviet Transitional Economies
44
Eastern and Former Soviet Transition Economies
0 1 2 3 4 5 6 7 8
Romania
Russia
Ukraine
Albania
Poland
China
Bulgaria
Slovenia
Slovakia
Lithuania
Czech Rep
Latvia
Hungary
Economic Fredom Index
1999
1990
45
Why is Economic Freedom Why is Economic Freedom Important?Important?
Economic rights are fundamental rights in the Economic rights are fundamental rights in the sense that without them there can be no sense that without them there can be no political freedom or civil freedomspolitical freedom or civil freedoms
They are a prerequisite for growth and They are a prerequisite for growth and developmentdevelopment
They are a prerequisite for broader human They are a prerequisite for broader human developmentdevelopment
46
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
Per
Cap
ita In
com
e, $
US
Bottom20%
2ndQuintile
3rdQuintile
4thQuintile
Top 20%
Per Capita Income and Economic Freedom Quintile
Least Free…………...Most FreeLeast Free…………...Most Free
47
Economic Freedom and Affluence
R2 = 0.5849
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
0 2 4 6 8 10
Economic Freedom Rating
Real G
DP
Per
Pers
on
(P
PP
$)
1998 .
48
-1.5
-1
-0.5
0
0.5
1
1.5
2
2.5
Gro
wth
Rat
e
Bottom20%
2ndQuintile
3rdQuintile
4thQuintile
Top 20%
Growth in Real per Capita GDP and Economic Freedom Quintile
Least Free…………...Most FreeLeast Free…………...Most Free
49
Growth of Real Per Capita Output in the 1990s of Growth of Real Per Capita Output in the 1990s of Countries That Improved the Most Since 1980Countries That Improved the Most Since 1980..
4.5
2.6
3.6
1.0
3.1
0.4
1.81.21.7
0
2
4
6
8
Argentina(+55)
Bolivia(+73)
ElSalvador
(+70)
Mauritius(+35)
NewZealand
(+20)
Peru (+70) Philippines(+31)
Costa Rica(+20)
Iceland(+34)
Countries in the Top 40 That Improved by 20 or More Places Since 1980
(Ranking improvement in parentheses.)
Rea
l GD
P G
row
th R
ate,
199
0s
50
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000
Luxembourg
United States
Switzerland
Singapore
Australia
Netherlands
Ireland
Hong Kong
United Kingdom
New Zealand
Income (per person) of the Top Ten
51
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000
Russia
Gabon
Romania
Algeria
Syria
Pap. New Guinea
Congo, Dem. R.
Guinea-Bissau
Malawi
Sierra Leone
Income (per person) of the Bottom Ten
52
Of course capitalism works to Of course capitalism works to boost economic outcomes ...…Butboost economic outcomes ...…ButWhat about Human Development? What about Human Development?
Do countries have to choose Do countries have to choose between economic development between economic development and community values and social and community values and social development? development?
53
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
Hum
an D
evel
opm
ent
Inde
x (o
ut o
f 1)
Bottom20%
2ndQuintile
3rdQuintile
4thQuintile
Top 20%
UN Human Development IndexRating by Economic Freedom Quintile
Least Free…………...Most FreeLeast Free…………...Most Free
54
Economic Freedom and Human Development
R2 = 0.3316
0.000
0.100
0.200
0.300
0.400
0.500
0.600
0.700
0.800
0.900
1.000
0 1 2 3 4 5 6 7 8 9 10
Economic Freedom Rating
Uni
ted
Nat
ions
Hum
an
Dev
elop
men
t Ind
ex
55
50
55
60
65
70
75
80
Yea
rs
Bottom20%
2ndQuintile
3rdQuintile
4thQuintile
Top 20%
Life Expectancy at Birth, 1998, and Economic Freedom Quintile
Least Free…………...Most FreeLeast Free…………...Most Free
56
0
5
10
15
20
25
30
35
Bottom20%
2ndQuintile
3rdQuintile
4thQuintile
Top 20%
1998 Adult Illiteracy Rate, % of population by Economic Freedom Quintile
Least Free…………...Most FreeLeast Free…………...Most Free
57
0
5
10
15
20
25
30
35
40
45
Hum
an P
over
ty I
ndex
Bottom20%
2ndQuintile
3rdQuintile
4thQuintile
Top 20%
Human Poverty Index and Economic Freedom Quintile
Least Free…………...Most FreeLeast Free…………...Most Free
58
0
10
20
30
40
50
60
70
80
per
1,00
0 liv
e bi
rths
(1
998)
Bottom20%
2ndQuintile
3rdQuintile
4thQuintile
Top 20%
Infant Mortality and Economic Freedom Quintile
Least Free…………...Most FreeLeast Free…………...Most Free
59
0
5
10
15
20
25
30
% u
nder
wei
ght (
90-9
6)
Bottom20%
2ndQuintile
3rdQuintile
4thQuintile
Top 20%
Child Malnutrition and Economic Freedom Quintile
Least Free…………...Most FreeLeast Free…………...Most Free
60
50556065707580859095
100
% o
f po
pula
tion
with
ac
cess
Bottom20%
2ndQuintile
3rdQuintile
4thQuintile
Top 20%
Access to Health Care and Economic Freedom Quintile
Least Free…………...Most FreeLeast Free…………...Most Free
61
05
101520253035404550
Bottom 20% 2nd Quintile 3rd Quintile 4th Quintile Top 20%
Income Inequality
Poorest 20% 2nd 20% 3rd 20% 4th 20% Richest 20%
Least Free…………...Most FreeLeast Free…………...Most Free
Percent of income accruing to the
62
0
10
20
30
40
50
60
70
0 2 4 6 8 10
Underground Economy % of GDPUnderground Economy % of GDP
Bolivia
Guatemala
Honduras
Panama
Peru
Outlier Countries :
Big
ger
Und
ergr
ound
Eco
nom
y
Least Free…………...Most FreeLeast Free…………...Most Free
63
2
2.2
2.4
2.6
2.8
3
3.2
3.4
3.6
Bottom 20% 2nd Quintile 3rd Quintile 4th Quintile Top 20%
Intellectual Property Rights
Least Free…………...Most FreeLeast Free…………...Most Free
Mor
e In
telle
ctua
l Pro
pert
y R
ight
s
64
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Kg
pe
r h
ec
tare
Bottom 20% 2nd Quintile 3rd Quintile 4th Quintile Top 20%
Economic Freedom and Cereal Yield
Least Free…………...Most FreeLeast Free…………...Most Free
65
0
1
2
3
4
5
6
7
8
9
Sc
ore
ou
t o
f 1
0
Bottom 20% 2nd Quintile 3rd Quintile 4th Quintile Top 20%
Economic Freedom and the Corruption Perception Index
66
Economic Freedom Versus Corruption
R2 = 0.4579
0
1
2
3
4
5
6
7
8
9
10
0 1 2 3 4 5 6 7 8 9
Economic Freedom Rating
Cor
rupt
ion
Rat
ing
67
0
10
20
30
40
50
60
70
80
90
Bottom 20% 2nd Quintile 3rd Quintile 4th Quintile Top 20%
% of Population with Access to Safe Water
Least Free…………...Most FreeLeast Free…………...Most Free
68
5
5.5
6
6.5
7
7.5
8
8.5
Bottom 20% 2nd Quintile 3rd Quintile 4th Quintile Top 20%
Political Stability
Least Free…………...Most FreeLeast Free…………...Most Free
69
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Bottom 20% 2nd Quintile 3rd Quintile 4th Quintile Top 20%
Labour Productivity(Non-Residential Capital Per Worker, 1990)
Least Free…………...Most FreeLeast Free…………...Most Free
70
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
Bottom 20% 2nd Quintile 3rd Quintile 4th Quintile Top 20%
Research & Development as a % of GDP (Average 1985-1998)
Least Free…………...Most FreeLeast Free…………...Most Free
71
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
Bottom 20% 2nd Quintile 3rd Quintile 4th Quintile Top 20%
Political Rights & Civil Liberties
Political Rights Civil liberties
72
Ingredients in the growth recipe: Ingredients in the growth recipe: evidence from 123 Countriesevidence from 123 Countries
73
Size of Government and GrowthSize of Government and Growth
-0.5
0
0.5
1
1.5
2
1st Quintile2ndQuintile
3rdQuintile
4thQuintile
5thQuintile
Larger Government..............Smaller Government
GrowthUS
Can
Spain
Hong Kong
Mexico
74
0
0.5
1
1.5
2
2.5
1stQuintile
2ndQuintile
3rdQuintile
4thQuartile
5thQuintile
Less Private...…….........More Private
Growth
Private Ownership and GrowthPrivate Ownership and Growth
Can US
Hong Kong
China
75
Government Transfers and Government Transfers and Subsidies and GrowthSubsidies and Growth
0
0.5
1
1.5
2
2.5
1stQuintile
2ndQuintile
3rdQuintile
4thQuintile
5thQuintile
Fewer Subsidies.............More Subsidies
Growth
US
Can
Hong Kong Mexico
76
Growth and the Friendliness of the Growth and the Friendliness of the Tax System (tax rates and brackets)Tax System (tax rates and brackets)
0.0%0.2%0.4%0.6%0.8%1.0%1.2%1.4%1.6%1.8%
1st Quintile 2ndQuintile
3rdQuintile
4th Quintile 5th Quintile
Less Friendly...……………….......More Friendly
Can US
China
Hong KongMexico
77
Growth and Taxes on TradeGrowth and Taxes on Trade
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1st Quintile 2ndQuintile
3rd Quintile 4th Quintile 5th Quintile
Lower Taxes............Higher Taxes
Growth
Can
Hong KongChina
MexicoUS
78
Some extensions of the Economic Some extensions of the Economic Freedom of the World ProjectFreedom of the World Project
Marketization indices for sub-national Marketization indices for sub-national jurisdictionsjurisdictions
The Fraser Institute Index for North AmericaThe Fraser Institute Index for North America The National Institute for Economic Research The National Institute for Economic Research
(Beijing) Marketization index for the 31 (Beijing) Marketization index for the 31 Chinese ProvincesChinese Provinces
Freetheworld.com
Economic Freedom of the Economic Freedom of the ProvincesProvinces Learning from international experience with Learning from international experience with
the Economic Freedom indexthe Economic Freedom index Growth and affluence are options and are not Growth and affluence are options and are not
predeterminedpredetermined Recognize that the provinces have very Recognize that the provinces have very
different selections from the range of policy different selections from the range of policy optionsoptions
Policy settings generally determine the Policy settings generally determine the perimeters for wealth creation activityperimeters for wealth creation activity
Freetheworld.com
Economic Freedom of the Economic Freedom of the ProvincesProvinces
Government OperationsGovernment Operations TakingsTakings Interprovincial sectorInterprovincial sector Labour Market RegulationLabour Market Regulation
Freetheworld.com
Government OperationsGovernment Operations
82
Total Government Consumption as a Percentage
of GDP
0 10 20 30
AB
ON
BC
SK
QUE
MB
NS
PEI
NWF
NB
1996
1995
Freetheworld.com
Total Liabilities and Net Worth of Government Business Enterprises and Debt Guarentees as a Percentage of GDP
0 10 20 30 40 50 60
QC
NB
MB
NF
SK
NS
AB
ON
BC
PE
Percentage of GDP
1994
1993
84
Provincial Regulatory Spending as a Percentage of Business Revenue
0 0.1 0.2 0.3 0.4 0.5
AB
ON
MB
BC
NS
PEI
QUE
SK
NB
NWF
Percent
1995-961993-94
Freetheworld.com
TakingsTakings
Freetheworld.com
Transfers and Subsidies as a Percentage of GDP
0 5 10 15
AB
NS
ON
MB
NB
SK
BC
PEI
QUE
NWF
Percentage of GDP
1995
1994
Freetheworld.com
Direct Corporate Taxes as a Percentage of Corporate Profits
0 0.1 0.2 0.3 0.4 0.5
NB
SK
NWF
PEI
ON
AB
NS
QUE
MB
BC
1997
1996
Freetheworld.com
Top Marginal Tax Rate (Federal and Provincial Combined)
0.42 0.44 0.46 0.48 0.5 0.52 0.54 0.56
AB
NS
PEI
MB
NB
ON
SK
QUE
NWF
BC
1997
1996
Freetheworld.com
Labour Market RegulationsLabour Market Regulations
Freetheworld.com
Annual Minimum Wage as a Ratio of Per Capita GDP
0 0.1 0.2 0.3 0.4 0.5 0.6
NWF
QUE
NS
PEI
NB
BC
ON
MB
SK
AB
1996
1995
Economic Freedom of the Economic Freedom of the ProvincesProvinces
Overall Provincial RankingOverall Provincial Ranking
Freetheworld.com
AB
ON
PE
SK
MB
NS
NB
BC
QC
NF
81
89
94
98*
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
Provincial Economic Freedom
81
85
89
93
94
95
98*
Freetheworld.com
1998 Estimate of Provincial Economic Freedom Index
0 2 4 6 8 10
AB
ON
PE
SK
MB
NS
NB
BC
QC
NF
94
The Relationship Between Relative Economic Freedom and Relative Per Capita GDP
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
0 0.5 1 1.5 2 2.5 3
Relative Per Capital GDP (by Province)
Rel
ativ
e P
rovi
nci
al M
arke
tizat
ion
95
ConclusionsConclusions Growth and development are choices rather Growth and development are choices rather
than predeterminedthan predetermined The ingredients of the growth recipe can be The ingredients of the growth recipe can be
determined by observing the policies of determined by observing the policies of successful jurisdictionssuccessful jurisdictions
The key to high economic performance is The key to high economic performance is providing economic freedom to citizensproviding economic freedom to citizens
The key to progressive social and human The key to progressive social and human development is economic freedomdevelopment is economic freedom
96
The End……phew!The End……phew!
www.freetheworld.comwww.freetheworld.com
www.fraserinstitute.cawww.fraserinstitute.ca
Other Slides of Interest Other Slides of Interest
98
0
1
2
3
4
5
6
7
8
9
Bottom 20% 2nd Quintile 3rd Quintile 4th Quintile Top 20%
Aid as a % of GNP
Least Free…………...Most FreeLeast Free…………...Most Free
99
0
5
10
15
20
25
Bottom 20% 2nd Quintile 3rd Quintile 4th Quintile Top 20%
CHILD LABOUR (% of children aged 10-14 active in the labour force)
Least Free…………...Most FreeLeast Free…………...Most Free
Next – Scores in Each Area Next – Scores in Each Area Adjusted by PopulationAdjusted by Population
101
World Average: Economic World Average: Economic Freedom, adjusted for populationFreedom, adjusted for population
5.98
5.31
5.7 5.696.05
6.576.87
3.8
4.3
4.8
5.3
5.8
6.3
6.8
7.3
1970 1975 1980 1985 1990 1995 1999
Countries with ranks in 1970
102
World Average: Government World Average: Government Consumption as a Percentage of Consumption as a Percentage of GDP, adjusted for populationGDP, adjusted for population
024
68
101214
1618
1970 1975 1980 1985 1990 1995 1999
Countries with ranks in 1970
103
World Average: Transfers as a World Average: Transfers as a percentage of GDP, adjusted for percentage of GDP, adjusted for populationpopulation
0
1
2
3
4
5
6
1970 1975 1980 1985 1990 1995 1999
Countries with ranks in 1970
104
World Average: Publicly owned World Average: Publicly owned assets as a percentage of GDP, assets as a percentage of GDP, adjusted for populationadjusted for population
0
10
20
30
40
50
1970 1975 1980 1985 1990 1995 1999
Countries with ranks in 1970
105
World Average: Existence of Price World Average: Existence of Price Controls, adjusted for populationControls, adjusted for population
0
1
2
3
4
5
1970 1975 1980 1985 1990 1995 1999
106
World Average: Right to own World Average: Right to own Foreign Currency, adjusted for Foreign Currency, adjusted for populationpopulation
0
1
2
3
4
1970 1975 1980 1985 1990 1995 1999
Countries with ranks in 1970
107
World Average: Tariff Rate, World Average: Tariff Rate, adjusted for populationadjusted for population
0
10
20
30
40
50
60
1970 1975 1980 1985 1990 1995 1999
Countries with ranks in 1980
108
World Average: Right to have World Average: Right to have Capital Transactions with Capital Transactions with Foreigners, adjusted for populationForeigners, adjusted for population
0
1
2
3
4
5
1970 1975 1980 1985 1990 1995 1999
Countries with ranks in 1980
109
World Average: Government World Average: Government Consumption as a Percentage of Consumption as a Percentage of GDP, adjusted for populationGDP, adjusted for population
0
2
4
6
8
10
12
14
16
1970 1975 1980 1985 1990 1995 1999
110
World Average: Transfers as a World Average: Transfers as a percentage of GDP, adjusted for percentage of GDP, adjusted for populationpopulation
0
1
2
3
4
5
6
7
8
1970 1975 1980 1985 1990 1995 1999
111
World Average: Publicly owned World Average: Publicly owned assets as a percentage of GDP, assets as a percentage of GDP, adjusted for populationadjusted for population
0
10
20
30
40
50
1970 1975 1980 1985 1990 1995 1999
112
World Average: Existence of Price World Average: Existence of Price Controls, adjusted for populationControls, adjusted for population
0
1
2
3
4
5
1970 1975 1980 1985 1990 1995 1999
113
World Average: Right to own World Average: Right to own Foreign Currency, adjusted for Foreign Currency, adjusted for populationpopulation
0
1
2
3
4
1970 1975 1980 1985 1990 1995 1999
114
World Average: Tariff Rate, World Average: Tariff Rate, adjusted for populationadjusted for population
0
10
20
30
40
50
60
1970 1975 1980 1985 1990 1995 1999
115
World Average: Right to have World Average: Right to have Capital Transactions with Capital Transactions with Foreigners, adjusted for populationForeigners, adjusted for population
0
1
2
3
4
5
1970 1975 1980 1985 1990 1995 1999