Post on 26-Mar-2015
Economic Freedom of the World: 2000 Annual Report
James Gwartney, Florida State University
Robert Lawson, Capital University
with Dexter Samida, Fraser Institute
Section 1: Changes in Economic Freedom, 1970-1997
Since 1980, economic freedom appears to have risen around the world.
Economic freedom leads to higher incomes, faster growth, and longer lives.
Chart 1: The Average Summary Rating, 1970-1997
6.3
5.45.3
5.45.6
6.3
6.6
5.0
5.5
6.0
6.5
7.0
1970 1975 1980 1985 1990 1995 1997
Chart 2: The Growth Rate in the 1990s of Countries That Improved the Most Since 1980.
2.9
5.85.0
4.2
5.9
2.7 3.1
5.0
1.9
6.8
0
2
4
6
8
New Z
ealan
d (+21
)
Irelan
d (+20
)
Argenti
na (+
55)
El Salv
ador
(+77
)
Bolivia
(+61
)
Peru (+
66)
Philipp
ines (
+25)
Mex
ico (+
28)
Mau
ritius
(+34
)
Trinida
d/Tob
ago (
+22)
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
Chart 3: Economic Freedom and Income, 1997
$1,669$3,440
$6,630
$10,595
$18,108
$0
$5,000
$10,000
$15,000
$20,000
Bottom 4th 3rd 2nd Top
Economic Freedom Rating Quintiles
Chart 4: Economic Freedom and Economic Growth in the 1990s
-1.32
0.820.33
1.60
2.27
-2.00
-1.00
0.00
1.00
2.00
3.00
Bottom 4th 3rd 2nd Top
Economic Freedom Rating Quintiles
Chart 5: Economic Freedom and Life Expectancy, 1997
55.2
60.1
70.072.6
75.9
50.00
60.00
70.00
80.00
Bottom 4th 3rd 2nd Top
Economic Freedom Rating Quintiles
Section 2: Changes in the Size of Government, 1970-1997
Government consumption as a share of total consumption has been relatively constant over the last two decades.
Transfer payments have increased sharply. Top marginal tax rates have fallen since
1980.
Chart 6: Government Consumption and Transfers, 1975-1997
17.2
19.4 19.5 19.7 19.6 19.1 19.0
5.9
7.9 8.49.4 9.7 9.8
11.3
5.0
10.0
15.0
20.0
25.0
1970 1975 1980 1985 1990 1995 1997
Govt.Consumption as ashare of TotalConsumption
TransferPayments as ashare of GDP
Chart 7: The Average Top Marginal Tax Rate, 1975-1997
54.8
58.2 57.2
47.6
39.437.3
35
45
55
65
1975 1980 1985 1990 1995 1997
Section 3: Inflation Around the World, 1970-1997
The average rate of inflation rose during the 1970s, but has fallen since the mid-1980s.
Chart 8: The Percentage of Countries with Inflation Rates Less than 5% During Previous
Five Years, 1970-1997
65.7
5.09.4
18.4
37.9
28.933.3
0.0
20.0
40.0
60.0
80.0
1970 1975 1980 1985 1990 1995 1997
Chart 9: The Median Inflation Rate, 1970-1997
4.8
11.0
14.5
6.3
8.8 9.1
5.8
0
5
10
15
20
1970 1975 1980 1985 1990 1995 1997
Section 4: Access to Sound Money, 1970-1997
The percentage of countries allowing citizens to hold foreign currency bank accounts has increased.
Likewise, the percentage of countries with sizeable foreign exchange black markets has fallen.
Chart 10: The Percentage of Countries in Which Citizens Were Free to Hold Foreign
Currency Bank Accounts, 1970-1997
26.323.5
27.625.6
35.2
42.7
48.4
20
25
30
35
40
45
50
55
1970 1975 1980 1985 1990 1995 1997
Chart 11: The Percentage of Countries with a Black Market Exchange Rate Premium
of 25% or More, 1970-1997
29.032.5 32.2 31.4
23.6
8.110.5
5
10
15
20
25
30
35
40
1970 1975 1980 1985 1990 1995 1997
Section 5: International Exchange and Capital Markets,
1970-1997 Tariffs have been reduced. Capital and financial markets have been
liberalized since 1980.
Chart 12: The Average Tax Rate on International Trade as a Share of Exports &
Imports, 1970-1997
6.5
7.0
6.5
6.0
5.2
4.3
3.7
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
1970 1975 1980 1985 1990 1995 1997
Chart 13: The Average Tariff Rate, 1980-1997
26.824.5
21.1
16.4
11.5
5
10
15
20
25
30
1980 1985 1990 1995 1997
Chart 14: The Average Rating for Area VI--International Exchange: Freedom to
Trade with Foreigners, 1970-1997
5.4 5.4 5.4
5.75.9
6.7
7.0
5.0
5.5
6.0
6.5
7.0
7.5
1970 1975 1980 1985 1990 1995 1997
Chart 15: The Average Rating in Area VII--Freedom of Exchange in Capital and
Financial Markets, 1970-1997
4.9
4.6 4.64.8
5.1
5.7
6.0
4.0
4.5
5.0
5.5
6.0
6.5
1970 1975 1980 1985 1990 1995 1997