Thursday, 21 January 2010

The 2010 index of economic freedom

The 2010 Index of Economic Freedom is now available. New Zealand comes in at number 4 with a score of 82.1, up by 0.1 compared to last year. Australia is one place ahead of New Zealand at number 3. New Zealand is also ranked 4th out of 41 countries in the Asia–Pacific region.

The index says
The economy has an impressive record of market reforms and benefits from its openness to global trade and investment. The banking sector is characterized by sound regulations and prudent lending practices, and well-implemented structural reforms have allowed the New Zealand economy to weather the recent global financial and economic crisis relatively unscathed.
The index's top ten countries areInterestingly the US score has fallen by 2.7 and the UK has fallen out of the top ten completely. The UK's score fell by 2.5, leaving it at number 11 in the rankings. Commenting on the fall in the US score Terry Miller at the Wall Street Journal writes,
The U.S. lost ground on many fronts. Scores declined in seven of the 10 categories of economic freedom. Losses were particularly significant in the areas of financial and monetary freedom and property rights. Driving it all were the federal government's interventionist responses to the financial and economic crises of the last two years, which have included politically influenced regulatory changes, protectionist trade restrictions, massive stimulus spending and bailouts of financial and automotive firms deemed "too big to fail." These policies have resulted in job losses, discouraged entrepreneurship, and saddled America with unprecedented government deficits.
The bottom two countries, for which data are available, are, at 178, Zimbabwe with a score of 21.4 which has fallen by 1.3 since last year and at 179, North Korea with a score of 1.0 which has fallen by 1. No real surprises with the bottom two.

1 comment:

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The Economic Freedom Index describes Economic Freedom as:

“ the fundamental right of every human to control his or her own labor and property. In an economically free society, individuals are free to work, produce, consume, and invest in any way they please, with that freedom both protected by the state and unconstrained by the state. In economically free societies, governments allow labor, capital and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself.”