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| economic-freedom-2009 (Photo credit: TZA) |
September 18, 2012
For Immediate Release
TORONTO, ON—Canada is among the top five most economically free countries in
the world, well ahead of the United States which has fallen to 18
th
overall, according
to the Fraser Institute’s annual Economic Freedom of the World report.
Canada, with an economic freedom score of 7.97 out of 10, tied with Australia to rank
fifth out of 144 nations and territories included in the Economic Freedom of the
World: 2012 Annual Report. Last year, Canada ranked sixth overall.
“Canada’s relatively high level of economic freedom has resulted in stronger
economic growth, higher income levels, and less pain from the global recession,” said
Fred McMahon, Fraser Institute vice-president of international policy research.
“Meanwhile, other nations embraced heavy-handed regulation and extensive overspending in response to the American and European debt crises. Consequently, their
levels of economic freedom decreased.”
The United States, long considered a champion of economic freedom among large
industrial nations, continues its protracted decline in the global rankings. This year,
the U.S. plunged to 18
th
, its lowest-ever ranking and a sharp drop from second overall,
the position it held in 2000. Much of this decline is a result of high spending on the
part of the U.S. government.
Hong Kong again topped the rankings of 144 countries, followed by Singapore, New
Zealand, and Switzerland. Australia and Canada tied for fifth overall.
Research shows that people living in countries with high levels of economic freedom
enjoy greater prosperity, more political and civil liberties, and longer life spans.
Globally, the average economic freedom score rose slightly to 6.83 in 2010, the most
recent year available, after plummeting to its lowest level in nearly three decades with
a score of 6.79 in 2009.
The annual Economic Freedom of the World report is the premier measurement of
economic freedom, using 42 distinct variables to create an index ranking of countries
around the world based on policies that encourage economic freedom. The
cornerstones of economic freedom are personal choice, voluntary exchange, freedom
to compete, and security of private property. Economic freedom is measured in five
different areas: (1) size of government, (2) legal structure and security of property
rights, (3) access to sound money, (4) freedom to trade internationally, and (5)
regulation of credit, labour, and business. The full report is available at
www.freetheworld.com.
Canada’s scores in key areas of economic freedom (from one to 10, where higher
values indicate higher levels of economic freedom) are:
• Size of government: 6.12 (74
th
overall)
• Legal system and property rights: 8.74 (12
th
overall)
• Access to sound money: 9.46 (25
th
overall)
• Freedom to trade internationally: 7.65 (43
rd
overall)
• Regulation of credit, labour, and business: 8.48 (sixth overall)
(more) Economic Freedom of the World—page 2
International rankings
Hong Kong offers the highest level of economic freedom worldwide, with a score of 8.90 out
of 10, followed by Singapore (8.69), New Zealand (8.36), Switzerland (8.24), Australia and
Canada (each 7.97), Bahrain (7.94), Mauritius (7.90), Finland (7.88), and Chile (7.84).
The rankings of other large economies include: United States (18
th
), Japan (20
th
), Germany
(31
st
), South Korea (37
th
), France (47
th
), Italy (83
rd
), Mexico (91
st
), Russia (95
th
), Brazil (105
th
),
China (107
th
), and India (111
th
).
Venezuela has the lowest level of economic freedom among the 144 jurisdictions measured.
Myanmar, Zimbabwe, Republic of Congo, and Angola round out the bottom five nations.
“Sadly, citizens living in the bottom-ranked countries face a significantly lower quality of life
since they lose the benefits that come from growth spurred on by economic freedom and suffer
reduced prosperity,” McMahon said.
When the rankings are adjusted to account for changes over the years, it shows that during the
past decade some African and formerly Communist nations have experienced the largest
increases in economic freedom worldwide: Rwanda (44
th
this year, compared to 106
th
in
2000), Malawi (84
th
, up from 114
th
), Ghana (53
rd
, up from 101
st
), Romania (42
nd
, up from
110
th
), Bulgaria (47
th
, up from 108
th
), and Albania (32
nd
, up from 77
th
).
Countries showing the greatest declines since 2000 in the adjusted rankings include Venezuela
(123
rd
this year, down from 94
th
), Argentina (110
th
, down from 34
th
), Iceland (59
th
, down from
11
th
), and the United States (19
th
, down from second overall).
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