Economic.freedom.report

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Economic Freedom

of the World Annual Report

James Gwartney Robert Lawson Florida State University Auburn University

with the assistance of Joshua Hall

Beloit College

with

Herbert Grubel Jakob de Haan

Simon Fraser University University of Groningen and CESifo Munich

Jan-Egbert Sturm Eelco Zandberg

KOF Swiss Economic Institute, ETH Zurich University of Groningen

Economic Freedom Network


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Copyright by the Fraser Institute. All rights reserved. No part of this book may be reproduced in any mannerwhatsoever without written permission except in the case of brief quotations embodied in critical articles and reviews.

Te authors of this book have worked independently and opinions expressed by them are, therefore, their own and donot necessarily reflect the opinions of the supporters, trustees, or other staff of the Fraser Institute. Tis publication inno way implies that the Fraser Institute, its trustees, or staff are in favor of, or oppose the passage of, any bill; or that theysupport or oppose any part icular political part y or candidate.

Editing, design, and typesetting by Lindsey Tomas MartinCover design by Bill RayPrinted and bound in Canada

Data available to researchers

Te full data set, including all of the data published in this report as well as data omitted due to limited space, can bedownloaded for free at . Te data file available there contains the most up-to-date andaccurate data for the Economic Freedom of the World index. Some variable names and data sources have evolved over the

years since the first publication in ; users should consult earlier editions of theEconomic Freedom of the Worldannu-al reports for details regarding sources and descriptions for those years. All editions of the report are available in PDF andcan be downloaded for free at . However, users are always strongly encouraged to use the

data from this most recent data file as updates and corrections, even to earlier years data, do occur. Users doing long termor longitudinal studies are encouraged to use the chain-linked index as it is the most consistent through time. If you haveproblems downloading the data, please contact Jean-Franois Minardi via e-mail to or via telephone +... ext. . If you have technical questions about the data itself, please contact RobertLawson via e-mail to or via telephone at +.... Please cite the data set as:

Authors: James Gwartney and Robert Lawson

itle: Economic Freedom Dataset, published inEconomic Freedom of the World: Annual Report

Publisher: Economic Freedom Network

Year:

URL:

Cite this publication

Authors: James D. Gwartney and Robert Lawson; with Joshua C. Hal l, with Herbert Grubel, Jakob de Haan, Jan-EgbertSturm, and Eelco Zandbergitle:Economic Freedom of the World: Annual ReportPublisher: Economic Freedom NetworkDate of publication: Digital copy available from and

Cataloguing Information

Gwartney, James D.Economic freedom of the world annual report / James D. Gwartney.

Annual.Description based on: issue by James D. Gwartney and Robert Lawson, with Joshua C. Hall, with Herbert Grubel,Jakob de Haan, Jan-Egbert Sturm, and Eelco Zandberg.Issued also online.ISSN -X; ISBN ---- ( edition).

. Economic history--- --Periodicals. . Economic indicators--Periodicals .I. Fraser Institute (Vancouver, B.C.) II. itle
http://www.freetheworld.com/http://www.freetheworld.com/http://www.freetheworld.com/http://www.freetheworld.com/


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Economic Freedom of the World: Annual Report iii

Table of Contents

Acknowledgments / iv

About the Authors / v

About the Contributors / vi

About the Members of the Economic Freedom Network / vi

Executive Summary / xxi

Chapter Economic Freedom of the World, /

Chapter The Impact of Financial and Economic Crises on Economic Freedom /

by Jakob de Haan, Jan-Egbert Sturm, and Eelco Zandberg

Chapter The Effects of American Recession-Fighting Policies on Economic Freedom /

by Herbert Grubel

Chapter Country Data Tables /

Appendix Explanatory Notes and Data Sources /


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iv Economic Freedom of the World: Annual Report

Acknowledgments

As always, we are grateful for the intellectual and financial assistance of the Fraser Institute. Mark Mullins,Executive Director from to , continued and strengthened the Fraser Institutes commitment to this

project. Without the assistance and guidance of both Michael Walker, Executive Director of the Fraser Institutefrom to , and the late Milton Friedman, this project would never have gotten off the ground.

Te members of the Economic Freedom Network again provided valuable support for this report. Ourthanks also go to Kathy Makinen and Joe Connors at Florida State University, and James Barth at Auburn

University. We are grateful for the hard work of the many people on staff at the Fraser Institute who help with theproject, including Fred McMahon, Jean-Franois Minardi, and Marisha Warrington. We already miss Amela

Karabegovis assistance with the project and wish her the best as she takes on new duties at the Fraser Institute.Steve Knack (World Bank) and Irene Mia (World Economic Forum) were instrumental in helping secure

data from their respective organizations. Stewart Wilson helped prepare the data for the country tables.Tanks also go to the Charles G. Koch Charitable Foundation and the Searle Freedom rust for their

support. Very special thanks go to Joshua Hall of Beloit College for his valuable assistance again with this yearsdata revisions and updates. He would like to thank the Social Philosophy and Policy Center at Bowling Green

State University for the support of its Visiting Scholar program during the summer of . We are pleased tohave Josh involved with the project.

James Gwartney & Robert Lawson


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About the Authors

James D. Gwartney

James Gwartney holds the Gus A. Stavros Eminent Scholar Chair at Florida State University, where he di-

rects the Stavros Center for the Advancement of Free Enterprise and Economic Education. He is a coauthor of

Economics: Private and Public Choice(Cengage/South-Western Press, ), a widely used text on the principles

of economics that is now in its twelfth edition. He is also a coauthor of an economics primer, Common Sense

Economics: What Everyone Should Know about Wealth and Prosperity(St. Martins Press, ). His publica-

tions have appeared in both professional journals and popular media such as the Wall Street Journaland the

New York imes. He served as Chief Economist of the Joint Economic Committee of the US Congress during

/. In , he was the recipient of the Adam Smith Award of the Association of Private EnterpriseEducation for his contribution to the advancement of free-market ideals. He is the immediate past President of

the Southern Economic Association. His Ph.D. in economics is from the University of Washington.

Robert A. Lawson

Robert Lawson is Associate Professor of Finance at Auburn University. Previously, he taught at Capital University,

where he held the George H. Moor Chair, and Shawnee State University. Professor Lawson has numerous profes-sional publications in journals such asPublic Choice, Cato Journal,Kyklos,Journal of Labor Research,Journalof Institutional and Teoretical Economics, andEuropean Journal of Political Economy. He has served as presi-dent of the Association of Private Enterprise Education and is a member of the Mont Pelerin Society. He writes

regularly for www.divisionoflabour.com. He earned his B.S. in economics from the Honors utorial College at

Ohio University and his M.S. and Ph.D. in economics from Florida State University.

Joshua C. Hall

Joshua Hall is an assistant professor in the Department of Economics and Management at Beloit College inBeloit, Wisconsin. He earned his B.A. and M.A. in economics from Ohio University and his Ph.D. from West

Virginia University. Formerly an economist for the Joint Economic Committee of the US Congress, he haspublished numerous policy studies and professional publications. Professor Halls research has appeared in

journals such as theAtlantic Economic Journal, Cato Journal,Journal of Economic Education, andJournal of

Labor Research.


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vi Economic Freedom of the World: Annual Report

About the Contributors

Herbert Grubel

Herbert Grubel is a Senior Fellow at the Fraser Institute and Professor of Economics (Emeritus), Simon Fraser

University. He has a B.A. from Rutgers University and a Ph.D. in economics from Yale University. He has taughtfull time at Stanford University, the University of Chicago, and the University of Pennsylvania; and has had tem-

porary appointments at universities in Berlin, Singapore, Cape own, Nairobi, Oxford, and Canberra. HerbertGrubel was the Reform Party Member of Parliament for Capliano-Howe Sound from to , serving as

the Finance Critic from to . He has published books and professional articles in economicsdealing with international trade and finance and a wide range of economic policy issues.

Jakob de Haan

Jakob de Haan is Professor of Political Economy, University of Groningen, the Netherlands. He was ScientificDirector of SOM, the graduate school and research institute of the faculty of Economics and Business of the

University of Groningen between and . He graduated from the University of Groningen, where healso got his Ph.D in . He has published extensively on issues like public debt, monetary policy, central bank

independence, political and economic freedom, and European integration. He is member of the editorial boardsofPublic ChoiceandEuropean Union Politics, editor of theEuropean Journal of Political Economy, and was

President of the European Public Choice Society from to . Professor de Haan has also been visitingprofessor at the Free University Berlin, Kiel Institute, and the University of Munich in Germany.

Jan-Egbert SturmJan-Egbert Sturm is Professor of Applied Macroeconomics and Director of the KOF Swiss Economic Instituteat the EH Zurich in Switzerland. He received his Ph.D. at the University of Groningen, the Netherlands, in

. After graduation, he became researcher at the University of Groningen until and taught as VisitingProfessor at the School of Business, Bond University, Gold Coast, Australia, in and . He was Head of

the Department for Economic Forecasting and Financial Markets at the Ifo Institute for Economic Research andProfessor of Economics at the University of Munich (LMU) in Germany from to . Between and

, Sturm was professor in Monetary Economics in Open Economies at the University of Konstanz, Germany,and Director of the Turgau Institute of Economics (WI) in Kreuzlingen, Switzerland, from to . In

his research, Jan-Egbert Sturm relies heavily on empirical methods and statistics, concentrating on monetaryeconomics, macroeconomics, and political economy and with a special interest in fields that are closely related

to practical and current problems.

Eelco Zandberg

Eelco Zandberg holds a B.Sc. degree in Economics from the University of Groningen and is currently ResearchMaster student (profile: Economics and Econometrics) at the University of Groningen. He will be a Ph.D. stu-

dent at the University of Groningen from September , onwards. In his masters thesis, he focuses on thepolitical economy of economic reform.


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About the Members of the Economic Freedom Network

Co-publishers of Economic Freedom of the World

Albania Albanian Center for Economic Research (ACER)Te Albanian Center for Economic Research is a public-policy institute that focuses on research and advocacy ac-

tivities. In addition to providing policy-makers and academics with applied economic research, it works to buildpublic understanding of economic development issues. E-mail: [email protected]; website: .

Argentina Fundacin LibertadFundacin Libertad is a private, non-profit institution working towards two main goals: the research and dis-tribution of public-policy issues (specifically in socio-economic and business areas) and the promotion of the

concept of a free-market society. Founded in Rosario, Argentina, in by a group of businessmen, profes-sionals, and intellectuals, the Foundation has developed its activities with the support of more than pri-

vate companies. Its projects include courses, lectures, seminars, research, studies, and publications as well asa strong permanent presence in the media, through columns, and television and radio programs produced by

the Foundation. Tese projects have focused on economic policies, education, regulations, and public spend-ing. Outstanding guest speakers have delivered lectures and conferences for the Fundacin Libertad; these

include Peruvian writer Mario Vargas Llosa, Nobel prize-winning economists such as Gary Becker, DouglassNorth, Robert Lucas, and James Buchanan, historian Paul Johnson, Nobel Peace Prize Laureate Lech Walessa,

and other intellectuals like Jean Francoise Revel. Fundacin Libertad has also led the creation of REFUNDAR,a network of Argentine foundations made up of ten organizations, located in the countrys major cities. Tis

network has helped us spread our ideas all over the country and is affiliated with similar international organi-

zations. E-mail: [email protected]; website: .

Australia Institute of Public Affairs

Established in , the IPA is Australias oldest and largest private-sector think-tank. Its aim is to fosterprosperity and full employment, the rule of law, democratic freedoms, security from crime and invasion, and

high standards in education and family life for the Australian people. o identify and promote the best meansof securing these values, the IPA undertakes research, organizes seminars, and publishes widely. E-mail:

[email protected]; website: .

Austria TIGRAIGRA is the premier Austrian think-tank on governance research. Headquartered in Salzburg, it was founded

to study and advance effective and efficient economic policies. IGRA organizes workshops and publishespapers and reports. Teir mission is From analysis to action. IGRA is a network of experts who provideeffective market solutions to policy-makers. Special emphasis is put on knowledge management, monitoring

the scope and quality of regulations (cutting red tape), and setting benchmarks. E-mail: [email protected];website: .

About the Economic Freedom Network

If you have questions about the Economic Freedom Network, please contact Jean-Franois Minardi via e-mail

to or via telephone +... ext. .
mailto:[email protected]:[email protected]://ipa.org.au/mailto:[email protected]://www.tigra.at/http://www.tigra.at/mailto:[email protected]://ipa.org.au/mailto:[email protected]:[email protected]


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Azerbaijan Center for Economic and Political Research

Te Center for Economic and Political Research, Azerbaijan, is a non-profit, non-governmental, research institutefounded in . Its mission is to facilitate the countrys democratization and economic liberalization and to in-

crease the role of civil society. Te main objectives of the Centers activities are analyzing the economic situationand progress of market reforms, political processes, foreign political relations, and regional economic and politi-

cal tendencies. Te Center also conducts sociological surveys and holds conferences, round-tables, and seminarson different aspects of economic and political reforms in the country. E-mail: [email protected].

Bahamas The Nassau InstituteTe Nassau Institute is an independent, non-political, non-profit institute that promotes economic growth,

employment, and entrepreneurial activity. It believes that this can best be achieved with a free-market econ-omy and a decent societyone that embraces the rule of law, the right of private property, the free exchange

of property and services, and the individual virtues of self-control, commitment, and good will. E-mail:[email protected]; website: .

Bangladesh Making Our Economy Right (MOER)MOER, founded in , is the countrys lone free-market institute and continues to struggle to promote free-market capitalism against all odds. Te concept of individual freedom and free markets determining the supply

of goods, services, and capital is little understood in Bangladesh. For the past years or so, Fabian socialismand the doctrines of Karl Marx were the basis of our countrys economy. MOER contributes free-market, lib-

ertarian articles in English and Bangla newspapers. We also moderate a weekly radio talk show that focuses onliberalization of the economy. MOER also publishes books both in Bangla and in English for free distribution

to libraries and others with the support of the International Policy Network of London. MOERs fourth book,published this year, Clamoring for Free Market Freedom in Bangladesh, has a foreword by Nobel laureate Milton

Friedman. Te book is a compilation of articles by Nizam Ahmad. E-mail: [email protected].

Belarus Scientific Research Mises CenterScientific Research Mises Center was founded in . Its mission is to advance ideas and ideals of free-market

democratic society based on individual choice and personal responsibility and to create an open community of

people who share those ideas. Te centre promotes the original ideas of limited government, individual liberty,and private property through publications and discussion forums and conferences. Te goal of the Center isto demonstrate the power of private institutions, both for-profit and non-profit, to create a good society and to

foster the understanding that free choice of a fully informed individual is the foundation for a just, prosperous,and open society. E-mail: [email protected];website: .

Belgium Centre for the New Europe

Te Centre for the New Europe is a European research institute, based in Brussels, that promotes a marketeconomy, personal liberty, and creativity and responsibility in an ordered society. CNE is founded on the be-

lief that European integration can work only in a society led by a spirit of democratic capitalism. Te Centredevelops policy alternatives, encourages economic growth and deregulation, seeks new market-based solutions

for social and environmental concerns, and promotes individual freedom, choice and responsibility. E-mail:[email protected]; website: .

Bolivia Fundacin Libertad y Democracia (FULIDE)Te Fundacin Libertad y Democracia is a non-profit organization founded by citizens interested in promoting

democracy and freedom. Te purpose of the Foundation is to investigate and analyze issues that have economic,political, or social impact on the free market and private initiative. Trough seminars, debates, and publications,

FULIDED seeks to reflect Bolivias participation in the global economy. E-mail: [email protected]; website:.
mailto:[email protected]:[email protected]://www.nassauinstitute.org/mailto:[email protected]:[email protected]://www.cne.org/http://www.cne.org/mailto:[email protected]:[email protected]://www.nassauinstitute.org/mailto:[email protected]:[email protected]


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Brazil Instituto Liberal do Rio de Janeiro

Instituto Liberal was founded to persuade Brazilians of the advantages of a liberal order. It is a non-profitinstitution supported by donations and the sponsorship of private individuals and corporations. Its by-laws

provide for a Board of rustees and forbid any political or sectarian affiliations. Te institute publishes books,organizes seminars, and elaborates policy papers on subjects related to public policy. E-mail:[email protected];

website: .

Bulgaria Institute for Market EconomicsEstablished in , IME is the first independent economic think-tank in Bulgaria. It is a private, registered,non-profit corporation that receives international support and is widely respected for its expertise. IME

designs and promotes solutions to the problems that Bulgaria is facing in its transition to a market econ-omy, provides independent assessment and analysis of the governments economic policies, and supports

an exchange of views on market economics and relevant policy issues. E-mail: [email protected]; website:.

Burkina Faso Le Centre des Affaires Humaines (CEDAH)Le Centre des Affaires Humaines (CEDAH) is a free-market educational and research public-policy think tankfounded in December in Burkina Faso. Te CEDAH is an independent, non-profit organization with no

affiliations to any political party. It is financed entirely from contributions from individuals, organizations, andfoundations. In order to protect its research independence, it does not accept grants from the government of

Burkina Faso or political parties. Te mission of CEDAH is to propose original and innovative solutions for thecrafting of efficient public policies, using successful reforms applied elsewhere as models. Te CEDAH studies

how markets function with the aim of identifying the mechanisms and institutions that foster the prosper-ity and long-term welfare of all the individuals that make up our society. E-mail: [email protected];

website: .

Cambodia The Cambodia Institute of Development StudyTe Cambodia Institute of Development Study (CIDS) is a non-profit, independent, local research institute

founded in December . Te Institutes mission is to provide high-quality research on the local and pro-

vincial levels in the specialized areas of economics, natural resources and environment, agriculture and ruraldevelopment, and public finance and governance, within the context of world integration. Its objectives areto generate and disseminate research on the national and provincial economies, and to enhance the capacity

and promote the professional development of local resources by providing training and practical researchopportunities. E-mail: [email protected] .

Canada The Fraser Institute

Our vision is a free and prosperous world where individuals benefit from greater choice, competitive mar-kets, and personal responsibility. Our mission is to measure, study, and communicate the impact of com-

petitive markets and government interventions on the welfare of individuals. Founded in , we are anindependent research and educational organization with locations throughout North America and inter-

national partners in over countries. Our work is financed by tax-deductible contributions from thou-sands of individuals, organizations, and foundations. In order to protect its independence, the Institute doesnot accept grants from government or contracts for research. E-mail: [email protected]; website:

, .

Chile Instituto Libertad y DesarrolloInstituto Libertad y Desarrollo is a private think-tank wholly independent of any religious, political, financial,

or governmental groups. It is committed to the free market and to political and economic freedom. It publishesstudies and analyses of public-policy issues. E-mail: [email protected]; website: .
mailto:[email protected]:[email protected]://www.institutoliberal.org.br/mailto:[email protected]://www.fraserinstitute.ca/http://www.lyd.com/http://www.lyd.com/http://www.fraserinstitute.ca/mailto:[email protected]://www.institutoliberal.org.br/mailto:[email protected]


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Colombia Instituto Libertad y Progreso (ILP)

Instituto Libertad y Progreso (ILP) is a research and educational institution based in Bogota and focusedon institutional topics, both in Colombia and internationally. ILP is focused on constitutional reform, con-

stitutional law, economic institutions, and political thought. E-mail: [email protected] ; website:.

Costa Rica Instituto para la Libertad y el Anlisis de PolticasTe Instituto para la Libertad y el Anlisis de Polticas (INLAPthe Institute for Liberty and Public Policy

Analysis) is a non-profit, non-partisan organization created to defend and promote individual liberty throughanalysis of public policy and educational activities. Its specific objectives are to increase awareness of the moral

foundations of liberty and to promote liberty as an individual right necessary to achieve the highest levels ofeconomic and human development; and to foster changes in social organization and public policies by influ-

encing the thinking of policy makers, community leaders, and citizens. INLAP produces timely analyses ofproposed laws, decrees, and regulations, and its recommendations provide guidance for elected officials who

seek to achieve greater individual liberty and creativity and a more productive economy. It also conducts de-tailed studies of well-meant public policies that may ultimately have unintended adverse effects. Te Institutes

studies and recommendations are published in books, journals, and newspapers, appear as position papers andbulletins, and are also available via our website. E-mail: [email protected]; website: .

Croatia The Institute of EconomicsTe Institute of Economics, Zagreb, established in , is a major scientific and research institution for the study ofeconomic processes and the application of contemporary theories in economics. Te Institutes objective is the eco-

nomic and social advance of Croatia. Research encompasses both macro-economics and micro-economics, policyissues (including specialized areas such as business economics), current economic trends, methods of economic

analysis, development of human resources, spatial and regional economics, international economics and technolog-ical development, and investment project planning. Researchers from inside and outside the Institute work together

on research projects. Te Institute employs full-time researchers, the majority of whom have completed special-ized training courses in foreign countries. Results of the Institutes research activities are published in books, reports

and studies as well as in scientific journals. Te Institute maintains close contact with international organizations,

professional associations, institutes, and universities. E-mail: [email protected]; website: .

Czech Republic Liberln Institut

Liberln Institut is an independent, non-profit organization for the development and application of classicalliberal ideas: individual rights, private property, rule of law, self-regulating markets, and delineated govern-

ment functions. It is financed by its various activities and by donations from individuals and private corpora-tions. E-mail: [email protected]; website: .

Denmark Center for Politiske Studier (CEPOS)

Te Center for Politiske Studier (Center for Political Studies) was founded in as an independent, non-profitthink-tank based in Copenhagen. It seeks to promote a free and prosperous society by conducting research

that will foster the policies, institutions, and culture that will best support a market economy, rule of law, and acivil society consisting of free and responsible individuals. It does so by producing academic studies and policyanalyses aimed partly at general political debate and partly at the political process in areas such as welfare, taxa-

tion, regulation, education, entrepreneurship, health care, the environment, and the organization of the publicsector. E-mail: [email protected]; website: .

Dominican Republic Fundacin Economa y Desarrollo, Inc.Te Fundacin Economa y Desarrollo, Inc. (FEyD) is a private, non-profit organization dedicated to foster-ing competitive markets, private enterprise, and strategies that promote economic development. o meet its

objectives, FEyD has several regular publications in the most important newspapers in the country. It also
http://mailtop:[email protected]/http://www.libertadyprogreso.net%22%20/o%20%22http://www.libertadyprogreso.netmailto:[email protected]://www.inlap.org/http://www.libinst.cz/mailto:[email protected]://www.cepos.dk/http://www.cepos.dk/mailto:[email protected]://www.libinst.cz/http://www.inlap.org/mailto:[email protected]://www.libertadyprogreso.net%22%20/o%20%22http://www.libertadyprogreso.nethttp://mailtop:[email protected]/


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produces a one-hour television program called rilogo, which is broadcast three t imes a week and explains

studies of the performance of the Dominican economy and its sectors. E-mail: [email protected].

Ecuador Instituto Ecuatoriano de Economa PolticaTe Instituto Ecuatoriano de Economia Politica (IEEP) is a private, independent, non-profit institution that defends

and promotes the classical liberal ideals of individual liberty, free markets, limited government, property rights,and the rule of law. Te IEEP achieves its mission through publications, seminars, and workshops that debate so-cioeconomic and political issues. Te IEEPs funding comes from voluntary donations, membership subscriptions,

and income from sales of its publications. E-mail: [email protected]; website: .

Estonia International University AudentesTe International University Audentes is the international institute of Audentes University, the biggest private

university in Estonia. Te university was established in . Our mission is to encourage and enable our stu-dents to develop their professional, academic and personal abilities, as creative, progressive, committed individ-

uals, to the very highest standards, so that they might best contribute to economic, social, cultural, intellectualand political life at national, European and global levels. We aim to be the leader in international education in

North-Eastern Europe. E-mail: [email protected]; website: .

France Association pour la Libert Economique et le Progrs Social (ALEPS)ALEPS promotes the idea of free markets generating social progress. It connects French liberal intel lectuals with

the global scientific community. Tanks to its permanent contacts with various prestigious foreign institutes, in ALEPS published Manifeste de lEurope pour les Europens, signed by faculties from countries.

Te economic collapse of central planning and the disappearance of totalitarian regimes in EasternEurope has not solved all social problems. A post-socialist society has still to be set up, both in Eastern Europe

as well as in Western countries such as France, where years of the welfare state have led to mass unemploy-ment, fiscal oppression, an explosive expansion of social security, an increase in poverty and inequality, and a

loss of moral virtues and spiritual values. ALEPS provides the political and intel lectual push towards this nec-essary revival. E-mail: [email protected]; website: .

Georgia Society for Disseminating Economic Knowledge: New Economic SchoolGeorgiaTe Society was founded in . Te goal of the Society is to disseminate and promote free-market ideasand to create a resource center promoting free-market economics for students, young scientists, teachers,

and other interested parties. Trough publications, conferences, seminars, lectures, panel workshops, summerand winter schools, scientific Olympiads, and competitions, the Society seeks to disseminate classical liberal

ideas. E-mail: [email protected]; website: .

Germany Liberales InstitutTe Liberales Institut (Liberty Institute), based in Potsdam, is the think-tank of the Friedrich-Naumann-

Foundation. It spreads free-market ideas through the publication of classical liberal literature, the analysis ofcurrent political trends, and the promotion of research. Te Institute organizes conferences and workshops

to stimulate an intellectual exchange among liberals around the world. E-mail: [email protected]; website:.

Ghana The Institute of Economic AffairsTe Institute of Economic Affairs (IEA), Ghana was founded in October as an independent, non-govern-

mental institution dedicated to the establishment and strengthening of a market economy and a democratic,free, and open society. It considers improvements in the legal, social, and political institutions as necessary con-

ditions for sustained economic growth and human development. Te IEA supports research and promotes andpublishes studies on important economic, socio-political, and legal issues in order to enhance understanding

of public policy. E-mail: [email protected]; el: --/--; Fax: --.
mailto:dampu%3C00AD%[email protected]@ecua.net.ecmailto:dampu%3C00AD%[email protected]@ecua.net.echttp://www.his.com/~ieep/mailto:[email protected]:[email protected]://www.his.com/~ieep/mailto:dampu%3C00AD%[email protected]@ecua.net.ec


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Guatemala Centro de Investigaciones Econmicas Nacionales

Te Centro de Investigaciones Econmicas Nacionales (CIENthe Center for Research on the NationalEconomy) was established in Guatemala in . It is a private, non-partisan, not-for-profit, public-policy in-

stitute, funded by the sale of its books and periodical publications, income from conferences and seminars,and the support it receives from its members and the public. Te Centers program is devoted to the technical

study of economic and social problems that impede the stable development of the nation. Its members, staff,research associates, and supporters share the principles of a social order of free and responsible individualsinteracting through a market economy functioning within the rule of law. E-mail: [email protected]; website:

.

Haiti Institut de Recherche pour la Libert conomique et la Prosprit (IRLEP)LInstitut de Recherche pour la Libert conomique et la Prosprit (IRLEP), Haiti, was founded in . It is

a non-partisan, non-profit, research and educational organization devoted to improving the quality of life inHaiti through economic growth and development. Trough publications and conferences, IRLEP promotes

the principles and concepts of individual rights, limited government, competition, free trade, and physical andintellectual property rights. IRLEP does not accept funding and subsidies from public institutions and political

parties. E-mail: [email protected].

Hong Kong Hong Kong Centre for Economic ResearchTe Hong Kong Centre for Economic Research is an educational, charitable trust established in to promote

the free market in Hong Kong by fostering public understanding of economic affairs and developing alternativepolicies for government. Te Centre publishes authoritative research studies and is widely recognized as the

leading free-market think-tank in Asia. It has been influential in persuading public opinion and the govern-ment in Hong Kong to liberalize telecommunications, open up air-cargo handling franchises, privatize public

housing, adopt a fully funded provident scheme instead of a pay-as-you-go pension scheme, remove the legallysanctioned fixing of deposit interest rates by banks, and adopt market mechanisms for protecting the environ-

ment. E-mail: [email protected]; website: .

Hungary Szazadveg Foundation

Te Szazadveg Foundation is a non-profit organization performing political and economic research, andadvisory and training activities. Tis think-tank is independent of the government or any political partiesand has been operating as a foundation since its establishment in . Szazadveg publishes the results of

its research to the public at large and also provides professional services to economic institutions, politi-cal and civil organizations, political parties, and the government. E-mail: [email protected]; website:

.

Iceland Centre for Social and Economic Research (RSE)RSE is an independent, non partisan, non-profit organization in Reykjavik, Iceland, founded in . Its mission

is to promote an understanding of private property and free-market ideas for a progressive, democratic society.RSE achieves its mission through programs of publication and conferences. Its work is assisted by a council of

academic advisors of the highest standard from various academic fields. RSE is funded entirely by voluntarycontributions from its supporters. E-mail: [email protected]; website: .

India Centre for Civil SocietyTe Centre for Civil Society (CCS) is an independent, non-profit, research and educational organization in-

augurated on August , and devoted to improving the quality of life for all citizens of India. Te CCSmaintains that, having earlier attained their political independence from an alien state, the Indian people

must now seek economic, social, and cultural independence from the Indian state. Tis can work from twodirections simultaneously: a mortar program of building or rebuilding the institutions of civil society and

a hammer program of readjusting the size and scope of the political society. Te CCS conducts monthly
http://www.cien.org.gt/mailto:[email protected]:[email protected]://www.hku.hk/hkcer/mailto:[email protected]://www.szazadveg.hu/mailto:[email protected]://www.rse.is/http://www.rse.is/mailto:[email protected]://www.szazadveg.hu/mailto:[email protected]://www.hku.hk/hkcer/mailto:[email protected]:[email protected]://www.cien.org.gt/


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dialogues on topical issues to introduce classical liberal philosophy and market-based solutions into public

debate. It has publishedAgenda for Change, a volume in chapters that outlines policy reforms for the Indiangovernment, Israel KirznersHow Markets Work, and Self-Regulation in the Civil Society, edited by Ashok Desai.

It organizes Liberty and Society seminars for college students and journalists. E-mail: [email protected] ;website: .

Indonesia The Institute for Development of Economics and Finance E-mail: [email protected]; website: .

Ireland Open Republic InstituteTe Open Republic Institute (ORI) is Irelands only platform for public-policy discussion that is specifically in-terested in individual rights within the context of open society and open market ideas. Te ORI works within

a non-political framework to provide public-policy analysis and new policy ideas to government, public repre-sentatives, civil servants, academics, students, and citizens. E-mail: [email protected]; website:

.

Israel Jerusalem Institute for Market StudiesTe Jerusalem Institute for Market Studies (JIMS) was founded in in Jerusalem, Israel, as an independent

non-profit, economic policy think tank. JIMS mission is to promote market solutions and limited government inIsrael and the region. In order to spread free-market ideas, JIMS conducts original research and publishes public-

policy papers and editorials. JIMS also runs a wide range of educational programs that targets elementary schoolstudents, high school students, college students and young professionals. E-mail: [email protected];

website: .

Italy Centro EinaudiTe Centro di Ricerca e Documentazione Luigi Einaudi was founded in in urin, Italy, as a free associa-

tion of businessmen and young intellectuals to foster individual freedom and autonomy, economic competi-tion and the free market. Te Centro is an independent, non-profit institute financed by contributions from

individuals and corporations, by the sale of its publications, and by specific research commissions. Te Centro

carries on research activities, trains young scholars and researchers, organizes seminars, conferences and lec-tures, and publishes monographs, books and periodicals, including: the quarterly journal,Biblioteca della lib-

ert;Rapporto sulleconomia globale e lItalia(Report on the global economy and Italy);Rapporto sul risparmioe sui risparmiatori in Italia(Report on savings and savers in Italy); andRapporto sulla distribuzione in Italia(Report on the retail trade in Italypublished also in English). E-mail: [email protected]; website:

.

Ivory Coast Bureau dAnalyse dIngenierie et de Logiciels (BAILO) E-mail: [email protected].

Jordon Young Entrepreneurs Association

Email: [email protected]; website: .

Kenya African Research Center for Public Policy and Market ProcessTe African Research Center for Public Policy and Market Process, Kenya, is the first research centre foundedin Africa by the African Educational Foundation for Public Policy and Market Process, an independent educa-

tional organization registered in the United States. Te primary mission of the Center and the Foundation isto promote ideas about free markets and voluntary associations in Africa. Te Center conducts research on all

aspects of free markets, voluntary association, and individual liberty, and publishes the results to as wide anaudience as possible. Te Center also organizes seminars and conferences to examine liberty and enterprise in

Africa. E-mail: [email protected].
mailto:[email protected]://www.ccsindia.org/mailto:[email protected]:[email protected]://www.theopenrepublic.org/http://www.centroeinaudi.it/mailto:[email protected]:[email protected]://www.centroeinaudi.it/http://www.theopenrepublic.org/mailto:[email protected]:[email protected]://www.ccsindia.org/mailto:[email protected]


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Korea Center for Free Enterprise

Te Center for Free Enterprise (CFE) is a foundation committed to promoting free enterprise, limited govern-ment, freedom and individual responsibility, the rule of law and restraint of violence. Funded by the members

of the Federation of Korean Industries (FKI), the CFE was founded as a non-profit, independent foundationon April , , at a time of economic crisis in Korean society. Te CFE has concentrated on championing a

free economy through books and reports on public policies, statistics, and analyses. In workshops and policyforums, the CFE has put forward alternatives to policies proposed as solutions for issues facing Korean soci-ety. E-mail: [email protected]; website: .

Kyrgyz Republic Economic Policy InstituteBishkek ConsensusTe Economic Policy InstituteBishkek Consensus (EPI), Kyrgyzstan, was created in December of as anon-profit, non-partisan, independent institute with developed partnerships and cooperative relationships with

government, business, international community, civil society, and the news media. EPIs mission is to promoteeconomic, social, and governance reforms in Kyrgyzstan, involving institutions of civil society to elaborate and

execute the reforms, developing local potential and using best international experience. Its strategic positionis to be an independent and highly objective source of information and research on public-policy issues, as

well as an unbiased forum for collaboration of diverse interest groups in the reform of public policy. E-mail:[email protected]; website: .

Lithuania Lithuanian Free Market InstituteLithuanian Free Market Institute (LFMI) is an independent, non-profit organization established in to ad-

vance the ideas of individual freedom and responsibility, free markets, and limited government. Since its incep-

tion, LFMI has been at the forefront of economic thought and reform in Lithuania. Not only has LFMI helpedframe policy debates by conducting research and creating reform packages on key issues, it has also conducted

extensive educational campaigns and played a key behind-the-scenes role in helping to craft and refine legis-lative proposals. LFMI promoted the idea of a currency board and provided decisive input to the Law on Litas

Credibility; it led the creation of the legal and institutional framework for the securities market and contributedsignificantly to the countrys privatization legislation; and it initiated and participated in the policy-making

process on private, fully funded pension insurance. LFMIs recommendations were adopted in legislation on

commercial banks, the Bank of Lithuania, credit unions, insurance, and foreign investment. LFMI significantlyinfluenced the improvement of company, bankruptcy and competition law.

LFMI has provided a valuable input to tax and budgetary policy. LFMIs influence led to introducing

program budgeting, exempting reinvested profits, reducing inheritance and gift taxes, abolishing capital-gainstax, suspending the introduction of real-estate tax, eliminating income tax on interest on loans from foreign

banks and international financial organizations as well as revising stamp duties, VA regulations, and othertaxes. LFMI initiated a deregulation and debureaucratization process aimed at eliminating excessive business

regulations and downsizing bureaucracy. An important influence was exerted on the revision of employment,capital market, land purchase, and building regulations. Passage was gained for a deregulation-based approach

to the fight against corruption. E-mail: [email protected]; website: .

Luxembourg DLetzeburger Land E-mail:[email protected]

Mexico Centro de Investigacin para el Desarrollo A.C.Centro de Investigacin para el Desarrollo A.C. (CIDAC) is an independent, not-for-profit research institutiondevoted to the study of Mexicos economy and political system. Its philosophy is that Mexicos economy can be

made viable only through a greater, more efficient, and more competitive private sector. CIDAC was foundedin as an executive training facility for the financial sector at large (public and private, banking and busi-

ness). It received an endowment from Banamex, then Mexicos largest private bank. In , immediately afterthe expropriation of the private banks, CIDAC changed its mandate from teaching to research. Over the last

five years, CIDAC has held over conferences for businessmen and its professionals continuously address
mailto:[email protected]://www.cfe.org/mailto:[email protected]://www.freema.org/mailto:[email protected]:[email protected]://www.freema.org/mailto:[email protected]://www.cfe.org/mailto:[email protected]


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academic, policy, and business forums. CIDAC has also published books on various economic, political, and

policy issues, monographs, and over op-ed pieces in Mexican, American, and European papers andmagazines. E-mail: [email protected]; website: .

Mongolia Open Society Forum

Te Open Society Forum is an independent, non-governmental, organization founded in . Te Forumsgoals are to provide quality policy research and analysis and broad public access to information resources per-taining to governance, economic, and social policies. It focuses on economic freedom, land reform, rule of law,

freedom of media, campaign financing, nomadic pastoralism, privatization, shadow economy, and educationpolicy. Te Forum conducts research and holds conferences to encourage public participation in policy formu-

lation. E-mail: [email protected]; [email protected]; website: .

Montenegro The Center for Entrepreneurship and Economic Development (CEED)Te Center for Entrepreneurship and Economic Development is the first non-governmental, non-partisan free-

market centre established in Montenegro. Its mission is to educate entrepreneurs about private ownership,democratic society, free markets, and the rule of law through a number of programs, initiatives, publications,

and events. Te Center was established to meet the demand for business knowledge by pioneering entrepreneurswho needed training to operate in a new environment after the break-up of the former Yugoslavia. E-mail:


Nepal The Prosperity Foundation E-mail: [email protected]; website: .

New Zealand The New Zealand Business Roundtable

Te New Zealand Business Roundtable is made up of the chief executives of about of New Zealands larg-est businesses. Its aim is to contribute to the development of sound public policies that reflect New Zealands

overall interests. It has been a prominent supporter of the countrys economic liberalization. E-mail:[email protected]; website: .

Nigeria Initiative of Public Policy AnalysisTe Initiative of Public Policy Analysis (IPPA) is a private, non-profit organization involved in research, educa-tion, and publication on matters affecting the freedom of individuals. Its objective is to provide market-oriented

analysis of current and emerging policy issues, with a view to influencing the public debate and the politicaldecision-making process. E-mail: [email protected]; website: ; mail: P.O. Box

Shomolu, Lagos-Nigeria.

Norway Center for Business and Society Incorporated (Civita)Civita, the first market-oriented think tank in Norway, was established in . It strives for increased consen-

sus on important market economic principles and their implications for welfare, freedom, and democracy. Civitais also dedicated to promoting personal responsibility and civil society to achieve larger, more important roles

in societys development. o communicate its ideas to the public, it conducts research, publishes reports andholds seminars and conferences. E-mail: [email protected]; website: .

Oman International Research Foundation (IRF)Te International Research Foundation (IRF), Sultanate of Oman, was established in as a non-governmental,

independent, non-profit Tink-ank based in Oman to conduct research on domestic and international eco-nomic issues with emphasis on the Arab World. Te IRF has set its research and public-affairs agenda on a col-

legial basis, relying on the input of its research staff, its editorial board, and its Senior Fellows. It maintains aworking arrangement with governmental and non-governmental organizations in the region and other parts of

the world. IRF is the regional member of Te Fraser Institutes Economic Freedom Network.
mailto:[email protected]://www.cidac.org/mailto:[email protected]://www.visit-ceed.org/mailto:[email protected]://www.nzbr.org.nz/mailto:[email protected]://www.ippanigeria.org/http://www.civita.no/http://www.civita.no/http://www.ippanigeria.org/mailto:[email protected]://www.nzbr.org.nz/mailto:[email protected]://www.visit-ceed.org/mailto:[email protected]://www.cidac.org/mailto:[email protected]


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Te vision of IRF is to create wealth and jobs through the promotion of economic freedom. Its mission is

to measure, research, and communicate to a global audience the impact of competitive markets on the welfare ofindividuals. Te Board of rustees of the IRF consists of high profile private-sector members from different or-

ganizations. IRF has initiated the establishment of a network of academic researchers to facilitate research proj-ects, which will help in its endeavor to research economic issues affecting the daily life fo individuals. E-mail:


Pakistan Alternate Solutions InstituteAlternate Solutions Institute, founded in , is the first free-market think tank in Pakistan. Its mission is ()to seek solutions to challenges pertaining to the economy, law, education, and health in accordance with the

principles of classical liberalism and () to promote the implementation of these solutions. Te Institute aimsto promote the concept of a limited, responsible government in Pakistan under the rule of law protecting life,

liberty, and property of all of its citizens without any discrimination. Te Institute conducts research and holdsseminars, workshops, and conferences to educate interested students, teachers, and journalists about the prin-

ciples of classical liberal ism. E-mail: [email protected]; website: .

Palestine Pal-Think for Strategic StudiesPal-Tink for Strategic Studies is an independent, non-profit, institute in Gaza, Palestine. It was established in

March . Pal-Tinks mission is promote peace, freedom, and prosperity through debate on public issues,producing policy recommendations for the decision-makers in Palestine and the Middle East. Te main objec-

tive of Pal-Tink is to conduct research on thematic issues that serve as a basis for policy debates on mattersthat are important to the Palestinians, the region, and the international community.

o achieve its vision of being a leading think tank in Palestine and the Middle East, Pal-Tink also or-ganizes conferences, workshops, round-table discussions, and other events on specific issues in Palestine and

the region to deepen the understanding by the various constituencies and to provide appropriate policy solu-tions. E-mail: [email protected]; website: .

Panama Fundacin Libertad

Te Fundacin Libertad, Panama, is a non-profit foundation engaged in the promotion and development of lib-

erty, individual choice, and voluntary cooperation and in the reduction of the size of government. FundacinLibertad was founded in by members of professional and business organizations to promote free enterpriseand democracy and to address issues affecting the freedom of the common citizen including the increasing

discretionary power of the state and the proliferation of legislation fostering discrimination and establishingprivileges, all of which are contrary to the spirit of democratic capitalism. Fundacin Libertad has drawn ini-

tial support from sister organizations such as Centro de Divulgacin del Conocimiento Econmico (CEDICE)in Caracas, Venezuela, and the Centro de Investigacin y Estudios Nacionales (CIEN) in Guatemala. Email:


Peru Centro de Investigacin y Estudios Legales (CITEL)CIEL was organized in . Its principal field is the economic analysis of law. o that end, it conducts re-

search on different legal institutions, publishes books, and organizes seminars and colloquia. E-mail:[email protected].

Philippines The Center for Research and CommunicationTe Center for Research and Communication (CRC) has, since , conducted research and published works on

domestic and international economic and political issues that affect the Asia-Pacific region. It provides forumsfor discussion and debate among academicians, businessmen, civil officials, and representatives of other sectors

that shape public opinion and chart the course of policies. CRC is the main research arm of the University of Asiaand the Pacific in Metro Manila, Philippines, and currently serves as the Secretariat of the Asia Pacific Economic

Cooperation (APEC) Business Advisory Council. E-mail: [email protected]; website: .
mailto:[email protected]://asinstitute.org/http://www.fundacionlibertad.org.pa/http://www.fundacionlibertad.org.pa/http://asinstitute.org/mailto:[email protected]


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Poland Centrum im. Adama Smitha

Te Centrum im. Adama Smitha (the Adam Smith Research CentreASRC) is a private, non-partisan, non-profit, public-policy institute. It was founded in and was the first such institute in Poland and in Eastern

Europe. Te ASRC promotes a free and fair market economy, participatory democracy, and a virtuous society.Its activities in research and development, education, and publishing cover almost all important issues within

the areas of economy and social life. Te ASRC acts as a guardian of economic freedom in Poland. More than experts are associated with the ASRC. E-mail: @smith.pl; website: .

Portugal Causa LiberalCausa Liberal is an independent, non-partisan, non-profit organization of Portuguese individuals who share

the principles of the classical liberal tradition and wish to further its application in modern-day Portugal. Itsmission is to defend the principles of the free society and its building blocks: individual rights, the rule of law,

free markets, and private property. Its primary goals are to establish and consolidate a network of individualswith an interest in the study, discussion, and promotion of the classical liberal tradition, and to advance free-

market ideas and policies in Portugal. E-mail: [email protected]; website: .

Romania Romania Think TankRomania Tink ank is an independent research institute founded in . Te Tink ank is funded en-

tirely by its founding members. Its objective is to promote the development of free market, low taxation,reduction of bureaucracy, free trade, and the stimulation of foreign investment. o this end, the Romania

Tink ank publishes numerous articles in the Romanian and international media, and studies and analyz-es issues relevant to the development of a free-market economy in Romania. E-mail: [email protected]; website:

.

Russia Institute of Economic AnalysisTe Institute of Economic Analysis is a macroeconomic research institute that analyzes the current economic

situation and policies and provides expert analysis of acts, programs, and current economic policy. It will of-fer advice to Russian government bodies, enterprises, and organizations and prepares and publishes scientific,

research, and methodological economic literature. It also conducts seminars, conferences, and symposia on

economic topics. Te Institute is an independent, non-governmental, non-political, non-profit research centrethat works closely with leading Russian and international research centres. Its research focuses on macroeco-nomic, budget, and social policies. E-mail: [email protected]; website: .

Serbia Free Market Center (FMC)

Free Market Center (FMC) is a non-profit, non-governmental organization founded in . It is the only free-market think-tank in Serbia. Te Center promotes the understanding and acceptance of ideas like individual

liberty, the free-market economy, limited government, and peaceful cooperation. o that end, the FMC strivesto achieve greater involvement in redirecting the attention not only of leading thinkers but also of members of

the public, entrepreneurs, policy-makers, and students to the role of free markets and the proper role of gov-ernment. Trough publications, discussion forums, and conferences, the Center seeks to disseminate classical

liberal ideas. E-mail: [email protected]; website: .

Slovak Republic The F.A. Hayek FoundationTe F.A. Hayek Foundation is an independent and non-partisan, non-profit organization that provides a forumfor the exchange of opinions among scholars, businessmen, and policy-makers on the causes of, and solutions to,

economic, social, and political problems. It proposes practical reforms of the economy, education, social security,and legislation as the Slovak Republic is transformed into an open society. Education of high-school and univer-

sity students is a large part of its activities. Te F.A. Hayek Foundation promotes classical liberal ism, which wasvirtually absent until : market economy, reduced role of the government, rule of law and individual choice,

responsibilities and rights to life, liberty, and property. E-mail: [email protected]; website: .
mailto:[email protected]://www.causaliberal.net/mailto:[email protected]://www.iea.org.uk/mailto:[email protected]://www.fmc.org.yu/mailto:[email protected]://www.hayek.sk/http://www.hayek.sk/mailto:[email protected]://www.fmc.org.yu/mailto:[email protected]://www.iea.org.uk/mailto:[email protected]://www.causaliberal.net/mailto:[email protected]


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South Africa The Free Market Foundation of Southern Africa

Te Free Market Foundation is an independent policy research and education organization founded in topromote the principles of limited government, economic freedom and individual liberty in Southern Africa.

Funding is received from members (corporate, organizational and individual), sponsorships, and the sale ofpublications. E-mail: [email protected]; website: .

Sri Lanka The Pathfinder FoundationTe Pathfinder Foundation has replaced the Center for Policy Research. Trough informed and well-researched

information, it seeks to challenge old ideas and the conventional wisdom, stimulate debate, change public at-titudes, and seek new and innovative solutions to the economic and social problems of Sri Lanka. E-mail:

[email protected].

Sweden Timbroimbro is a Swedish think-tank that encourages public opinion to favour free enterprise, a free economy, and a free

society. imbro publishes books, papers, reports, and the magazine, Smedjan. It also arranges seminars and estab-lishes networks among people. Founded in , imbro is owned by the Swedish Free Enterprise Foundation, which

has as its principals a large number of Swedish companies and organizations. E-mail: [email protected];website: .

Switzerland Liberales InstitutTe Liberales Institut is a forum where the basic values and concepts of a free society can be discussed and ques-tioned. Te Institutes aim is the establishment of free markets as the best way towards the goals of openness, diver-

sity, and autonomy. Te Liberales Institut is not associated with any politica l party. Trough publications, discus-sion forums, and seminars, it seeks to develop and disseminate classical liberal ideas. E-mail: [email protected];

website: .

Trinidad and Tobago Arthur Lok Jack Graduate School of Business, The University of the West IndiesTe Arthur Lok Jack Graduate School of Business was created in as a channel partner for developing mana-

gerial talent for the business community in rinidad and obago. Its mission is to empower people and organiza-

tions in developing nations to optimize their performance capabilities and international competitiveness throughdevelopment and deployment of consulting; education, research, and training resources. One of the Institutescore services are business and academic research in areas of real concern to business managers, enabling

them to improve their ability to manage successfully in the face of increasingly complex markets. E-mail:[email protected]; website: .

Turkey Association for Liberal Thinking

Te Association for Liberal Tinking is a non-profit, non-governmental organization seeking to introduce theliberal democratic tradition into urkey. Te Association promotes the understanding and acceptance of ideas

like liberty, justice, peace, human rights, equality, and tolerance. It also encourages academic writing on liberalthemes to help the urkish people assess contemporary domestic and international changes and attempts to

find effective solutions to urkeys problems within liberal thought. Te Association for Liberal Tinking is notinvolved in day-to-day politics and has no direct links to any political party or movement. Instead, as an inde-pendent intellectual group, it aims to set broader political agendas so as to contribute to the liberalization of

economics and politics in urkey. E-mail: [email protected]; website: .

Ukraine The Ukrainian Center for Independent Political ResearchTe Ukrainian Center for Independent Political Research (UCIPR) was established in early as a non-profit,

non-partisan, and non-governmental research institution that would increase awareness of democracy amongthe Ukrainian people and analyze domestic and international politics and security. Te UCIPR is politically

independent; it does not accept any funding from either the state or any political party. Te UCIPR publishes
mailto:[email protected]://www.freemarketfoundation.com/http://www.timbro.se/http://www.liberal-dt.org.tr/http://www.liberal-dt.org.tr/http://www.timbro.se/http://www.freemarketfoundation.com/mailto:[email protected]


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books and research papers on Ukraines domestic and foreign policy, the economy in transition, security, re-

lations with neighbouring states, the Crimean dilemma, interethnic relations, and the freedom of the newsmedia. Te Center has hosted a number of national and international conferences and workshops. E-mail:


United Kingdom Institute of Economic Affairs (IEA)Te mission of the Institute of Economic Affairs (IEA) is to improve public understanding of the foundationsof a free and harmonious society by expounding and analyzing the role of markets in solving economic and

social problems, and bringing the results of that work to the attention of those who influence thinking. Te IEAachieves its mission by a high-quality publishing program; conferences, seminars, and lectures on a range of

subjects; outreach to school and college students; brokering media introductions and appearances; and otherrelated activities. Incorporated in by the late Sir Antony Fisher, the IEA is an educational charity, limited

by guarantee. It is independent of any political party or group, and is financed by sales of publications, confer-ence fees, and voluntary donations. E-mail: [email protected]; website: .

United States of America Cato InstituteFounded in , the Cato Institute is a research foundation dedicated to broadening debate about public policyto include more options consistent with the traditional American principles of limited government, individual

liberty, free markets, and peace. o that end, the Institute strives to achieve greater involvement by the intel-ligent, concerned, lay public in questions of policy and the proper role of gov ernment through an extensive

program of publications and seminars. E-mail: [email protected]; website: .

Venezuela The Center for the Dissemination of Economic Knowledge (CEDICE)CEDICE is a non-partisan, non-profit, private association dedicated to the research and promotion of phil-

osophical, economic, political, and social thinking that focuses on individual initiative and a better under-standing of the free-market system and free and responsible societies. o this end, CEDICE operates a li-

brary and bookstore, publishes the series, Venezuela oday, and other studies, provides economic training forjournalists, and conducts special events and community programs. E-mail: [email protected]; website:

.

Vietnam Research Center for Entrepreneurship DevelopmentTe Center, founded in , is a non-government research and educational organization devoted to entrepre-

neurial development of private sector in Vietnam. Its mission is to study the development of policies that createthe most favorable institutional and policy environment for entrepreneurial development of the private sector

in Vietnam. Trough publications, discussion forums, and conferences, the Center seeks to disseminate andencourage appropriate polices and entrepreneurial development. E-mail: [email protected]; website:

.

Zambia The Zambia Institute for Public Policy Analysis (ZIPPA)Te mission of the Zambia Institute for Public Policy Analysis (ZIPPA) is to promote wider appreciation of the

key role of free markets and competition in economic development. Zambia, though peaceful and stable, is cur-rently mired in a combination of protracted poverty, the HIV/AIDS pandemic, political animosities following adisputed election, and scepticism about economic liberalization. In this depressing environment, ZIPPA wants

to play a constructive role by promoting realistic economic policies and by suggesting solutions that have beensuccessfully applied in other countries to similar economic problems. E-mail: [email protected].
mailto:[email protected]://www.ucipr.kiev.ua/mailto:[email protected]://www.iea.org.uk/mailto:[email protected]://www.cato.org/mailto:[email protected]://www.cedice.org.ve/http://www.cedice.org.ve/mailto:[email protected]://www.cato.org/mailto:[email protected]://www.iea.org.uk/mailto:[email protected]://www.ucipr.kiev.ua/mailto:[email protected]


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Executive Summary

Economic Freedom of the World

Te index published inEconomic Freedom of the World measures the degree to which the policies and institutions ofcountries are supportive of economic freedom. Te cornerstones of economic freedom are personal choice, voluntary

exchange, freedom to compete, and security of privately owned property. Forty-two data points are used to constructa summary index and to measure the degree of economic freedom in five broad areas:

Size of Government: Expenditures, axes, and Enterprises;

Legal Structure and Security of Property Rights; Access to Sound Money;

Freedom to rade Internationally; Regulation of Credit, Labor, and Business.

Economic freedom has grown considerably in recent decades

e chain-linked summary index (exhibit 1.4) permits comparison over time. e average economic freedom

score rose from . (out of ) in to . in , the most recent year for which data are available.

Of the 103 nations with chain-linked scores going back to 1980, 92 saw an improved score and 11 saw a decrease.

12 nations increased their score by more than 2.50 points since 1980, though most started from a very low

base. With the increase noted in parentheses, they are: Ghana (.), Uganda (.), Israel (.), Jamaica

(.), Peru (.), Hungary (.), El Salvador (.), Mauritius (.), Nigeria (.), Iran (.), Nicaragua(.), and Chile (.).

Only three nations decreased their score by more than one point, Zimbabwe (2.33), Venezuela (2.26), and

Myanmar (1.58).

In this years index, Hong Kong retains the highest rating for economic freedom, 8.97 out of 10. e other top

nations are: Singapore (.), New Zealand (.), Switzerland (.), Chile (.), the United States (.),

Ireland (.), Canada (.), Australia (.), and the United Kingdom (.)

e rankings of other large economies are Germany, 27 (7.50), Japan 30 (7.46), France 33 (7.43), Italy 61 (6.95),

Mexico (.), Russia (.), China (.), India (.), and Brazil (.),

Eight of the nations in the bottom 10 are African. e other two nations are Venezuela and Myanmar. e ten

nations are: Zimbabwe (.), Myanmar (.), Angola (.), Venezuela (.), Republic of the Congo (.),

Central African Republic (.), Guinea-Bissau (.), Democratic Republic of the Congo (.), Chad (.),and Niger (.).


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Nations that are economically free out-perform non-free nations in indicators of well-being

Nations in the top quarti le of economic freedom had an average per-capita GDP of $32,443 in 2007, com-

pared to $3,802 for those nations in the bottom quartile in constant 2005 international dollars. (Exhibit 1.6)

e top quartile has an average per-capita economic growth rate of 2.4%, compared to 0.9% for the bottom

quartile. (Exhibit .)

In the top quarti le, the average income of the poorest 10% of the population was $9,105, compared to $896 for

those in the bottom quartile, in constant international dollars. (Exhibit .)

Life expectancy is 79 years in the top quarti le compared to 59 years in the bottom quarti le. (Exhibit 1.12)

Nations in the top quarti le, have an average score of 84.8 out of 100 for environmental performance while

those in the bottom quartile have an average score of .. (Exhibit .)

Nations in the top quarti le have an average score of 7.5 for corruption on a scale of 1 to 10, where 10 marks the

lowest level, while those in the bottom quartile have an average score of .. (Exhibit .)

Nations in the top quarti le have an average score of 1.6 for political rights on a scale of 1 to 7, where 1 marks

the highest level, while those in the bottom quartile have an average score of .. (Exhibit .)

Nations in the top quarti le have an average score of 1.6 for civil liberties on a scale of 1 to 7, where 1 marks the

highest level, while those in the bottom quartile have an average score of .. (Exhibit .)

Economic Freedom of the World,

Chapter provides an overview of the economic freedom of the world project and the results of this report. It also

reviews some causes of the current economic crisis and looks back at the Great Depression, examining briefly some ofthe policy responsesmonetary contraction, trade restrictions, and increased government spending and taxationthat, perversely, prolonged that economic downturn. It warns against repeating similar mistakes.

The Impact of Financial and Economic Crises on Economic Freedom

Chapter reviews the impact of banking crises, and their negative economic impact, on economic freedom. Whilethe study finds that economic freedom may decline in the short term in response to crises, the results also indicate

that, over a longer time, economic freedom had a tendency to increase after a banking crisis. As this case study shows,in Norway and Sweden the banking crisis did not distract these countries from continuing with their market-based

reform policies.Te econometric results for changes in the level of economic freedom based on observations at -year intervals

from to suggest that countries that had a banking crisis in the previous period increased their level of eco-

nomic freedom. Tis result stands in sharp contrast to the chapters findings for the sample of annual observationsover the period from to that suggest that in the short term a banking crisis lowers economic freedom.

However, the authors warn that, due to the global nature of the current crisis, their results may underestimatethe impact of the crisis on economic freedom. In other words, evidence based on previous crises may not capture the

impact of the current crisis fully. As most countries in the world are in a serious economic downturn at the same time,the authors caution that it will be much harder to get out of this recession.


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Economic Freedom of the World: Annual Report xxiii

The Effects of American Recession-Fighting Policies on Economic Freedom

Te third chapter examines the recession-fighting policies of the US government and concludes that many policy re-

sponses will reduce the countrys overall level of economic freedom in, at least, the short-term, through the followingmechanisms.

Monetary policy will likely cause ination.

e scal-stimulus package will likely result in unprecedented levels of decits and interest payments that

reduce the amount of credit going to the private sector.

Federal spending on infrastructure, social programs, and transfers to the states will increase government

consumption and transfers, lead to more regulation and, in some cases, encroach on state responsibilities,damaging the integrity of the legal system.

Bailout policies involve changes in existing rules, damaging property rights, the integrity of the legal system,

and the legal enforcement of contracts.

Other measures, or proposed measures, that will reduce economic freedom include higher marginal income-tax rates, increased regulation of the financial and manufacturing industries, and increased regulation related

to the cap-and-trade system.

Te policy implications of these findings are simple, the author argues. Since reductions in economic freedom lowereconomic growth and the overall well-being of Americans, the policies should be evaluated in the light of these costs

when they are undergoing detailed design, are implemented, and when they are reviewed in the future.

Data available to researchers

Te full data set, including all of the data published in this report as well as data omitted due to limited space, can

be downloaded for free at . Te data file available there contains the most up-to-dateand accurate data for the Economic Freedom of the World index. Some variable names and data sources have evolved

over the years since the first publication in ; users should consult earlier editions of theEconomic Freedom of

the Worldannual reports for details regarding sources and descriptions for those years. All editions of the report are

available in PDF and can be downloaded for free at . However, users are always stronglyencouraged to use the data from this most recent data file as updates and corrections, even to earlier years data, do

occur. Users doing long term or longitudinal studies are encouraged to use the chain-linked index as it is the mostconsistent through time. If you have problems downloading the data, please contact Jean-Franois Minardi via e-mail

to or via telephone +... ext. . If you have technical questions aboutthe data itself, please contact Robert Lawson via e-mail to or via telephone at +....Please cite the data set as:

Authors: James Gwartney and Robert Lawson

itle: Economic Freedom Dataset, published inEconomic Freedom of the World: Annual Report Publisher: Economic Freedom Network

Year: URL: .
http://www.freetheworld.com/http://www.freetheworld.com/http://www.freetheworld.com/http://www.freetheworld.com/


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Annual Report


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Economic Freedom of the World: Annual Report

Te index published in Economic Freedom of the World(EFW) is designed to measure the consistency of a nations

institutions and policies with economic freedom. Te keyingredients of economic freedom are

personal choice

voluntary exchange coordinated by markets

freedom to enter and compete in markets

protection of persons and their propertyfrom aggression by others.

Tese four cornerstones underpin the design of the EFW

index. Put simply, institutions and policies are consistentwith economic freedom when they provide an infrastruc-

ture for voluntary exchange and protect individuals andtheir property from aggressors. In order to achieve a high

EFW rating, a country must provide secure protectionof privately owned property, even-handed enforcement

of contracts, and a stable monetary environment. It also

must keep taxes low, refrain from creating barriers to bothdomestic and international trade, and rely more fully onmarkets rather than the political process to allocate goods

and resources.Since , there has been a gradual but steady

movement toward economic freedom. Monetary policyhas been more stable, trade barriers have declined, high

marginal tax rates reduced, and exchange rate controlsvirtually eliminated. Consider the following. Te median

ination rate was 4% in 2007, down from 14% in 1980.

Among the countries with data in both periods, only

had a double-digit average annual rate of inflation dur-ing the period from to , compared to for thefive years ending in . Te mean tariff rate fell from

26.2% in 1980 to 9.0% in 2007. e number of countries

imposing marginal tax rates of 50% or more fell from 62 in

to in . Fifty countries imposed exchange rate

controls that generated a black market premium of 10% or

more in , but only three in .Te economic progress during this era has been

impressive. Te worlds inflation-adjusted, per-capita

income rose from $5,400 in 1980 to $8,500 in 2005, an

average annual growth rate of approximately 2% (Shleifer,

). Over this quarter of a century, the one-dollar-per-

day poverty rate fell from 34% to 19%, life expectancy has

risen from . years to ., and the infant mortality rate

has fallen from 53% to 36%. Other indicators of quality of

life such as school attendance, literacy, and access to cleanwater have all improved.

Economic growth is primarily the result of gainsfrom trade, capital investment, and the discovery of

improved products, lower-cost production methods, andbetter ways of doing things. Numerous studies have shown

that countries with more economic freedom grow morerapidly and achieve higher levels of per-capita income than

those that are less free. Similarly, there is a positive rela-tionship between changes in economic freedom and the

growth of per-capita income. Given the sources of growthand prosperity, it is not surprising that increases in eco-

nomic freedom and improvements in quality of life have

gone hand in hand during the past quarter of a century.

Learning the right lessons from the

current global economic downturn

Te world now confronts a global economic downturn

and it is critically important that we learn the right les-sons from the experience. At this point, two things are

clear. First, government regulation and improper mon-etary policy were major contributing factors to the crisis.

Imprudent lending practices, highly leveraged financialinstitutions, imprudent relations between bond dealersand risk-rating agencies, and high-pressure marketing all

played a role. Moreover, global financial markets quicklyspread the risky mortgage-backed securities throughout

the world. But the foundation of the crisis was providedby government regulations and the policies of the cen-

tral banks that mandated the risky loans and supplied themassive credit that created the boom and bust in the hous-

ing industry. Furthermore, the key players in the United

Chapter : Economic Freedom of the World,


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Chapter : Economic Freedom of the World,

States, including the two huge government-sponsored

lenders, Fannie Mae and Freddie Mac, were doing whattheir regulators wanted them to do: extending more and

larger loans with lower down payments to householdswith low and moderate incomes.

Second, the opponents of economic freedom areblaming the crisis on the operation of markets and hop-ing to use it as an excuse for a vast expansion in govern-

ment. Teir success is dependent on what we learn fromthe experience.

The Great Depression revisited

Te closest parallel to the current situation is the GreatDepression. At this point, both the severity and expected

duration of the current downturn are mild compared tothe Great Depression. But the downturn of did not

start out as a decade-long catastrophic event, nor didit have to be. More than any event in economic history,

the Great Depression illustrates the tragic results of per-verse government policies. As Milton Friedman and Anna

Swartz have shown, the downturn was brought about bya monetary contraction. In the United States, the money

supply fell by more than 30% between 1929 and 1933.

While monetary expansion was present from to ,

the central bank once again shifted toward monetary con-traction in (Friedman and Schwartz, ).

Restrictive trade policies added to the downwardspiral. Te infamous Smoot-Hawley trade bill enacted

in June increased tariff rates in the United States

by more than 50%. Predictably, other countries60 intotalretaliated with similar trade restrictions and worldtrade fell by nearly two-thirds in the three years that fol-

lowed. Smoot and Hawley argued that the higher tariffswere needed to save jobs. Te unemployment rate was

7.8% when the bill was enacted; it tripled to 25% over

the next three years. Many history books tell us that the

Great Depression was caused by the stock-market crashof October . But they do not inform us that the stock

market rose steadily during the five months beginningin November and had returned to the level it had

been in October by mid-April, . However, asit became obvious that Smoot-Hawley was going to pass,stock prices plummeted once again.

As if this was not enough, the Hoover Administrationand Democratic Congress passed the largest tax increase

For additional details on how regulation undermined the

mortgage lending market, see Liebowitz, ; Wallison,

; and Sowell, . For an analysis of the contribution of

monetary policy to the crisis, see Taylor, .

in American history in . Te top marginal rate was

raised from 25% to 63% and other rates increased by sim-ilar proportions. Te Roosevelt Administration followed

with still higher tax rates, pushing the top marginal rateto 79% in 1936. e policies of the Roosevelt adminis-

tration also included price controls, cartelization of morethan industries, destruction of agriculture productsin order to drive their prices higher, and numerous other

policy shifts that generated uncertainty and prolonged therecession until the beginning of World War II.

One would think that government failure on themassive scale that generated and prolonged the Great

Depression would lead to reforms that would curtail therole of government. But this was not the case. People

learned the wrong lesson from the episode.

What are we learning from the current crisis?

Is the current crisis going to increase or reduce economic

freedom? Does it make any difference whether countriesadopt policies consistent with economic freedom? It mat-

ters because a market economy provides incentives for pro-ductive action dramatically different from those of an econ-

omy that is managed and directed by the political process.With markets, profits and losses will direct people

toward productive actions and away from unproductiveand counterproductive ones. If a business is going to be

successful in a market economy, it must bid resourcesaway from others and use them to supply goods that peo-

ple value enough to pay prices sufficient to cover their

costs. Profits can properly be viewed as a reward forusing resources productively, that is, in ways that increasetheir value. In contrast, losses are a penalty imposed on

those who use resources in ways that reduce their value.Markets also provide people with a strong incentive to

innovate, and discover lower-cost production methodsand new products that people value highly relative to cost.

Tis incentive to use resources productively and discoverbetter ways of doing things is the driving force underlying

economic growth and progress.Te incentive structure of the political process is

vastly different. Tere is nothing comparable to profits and

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