Economic freedom: the soggy side of stagnant

The 14th edition of The Heritage Foundation/Wall Street Journal Index of Economic Freedom has been released. Though its methodology is slightly different, it confirms the results of a similar project run by the Cato Institute and Fraser Institute.

There’s a good first-dip commentary on it by Mary Anastasia O-Grady over at the Wall Street Journal, which includes this table:

Mauritius scores in the top 20, and Botswana impresses too. Uganda (52nd) and South Africa (57th) score only slightly better than the global average of 60.3%, however. Notable also is that South Africa’s score has been on the soggy side of stagnant over the past decade or so:

As the WSJ commentary explains in some detail, the report shows once again that economic freedom and income are highly correlated. This supports the contention that economic freedom is a cause of (and necessary condition for) growing prosperity: the more economic freedom people enjoy, the more likely they’ll become increasingly better off. To quote the authors:

…economic freedom is the key to creating an environment that allows a virtuous cycle of entrepreneurship, innovation, and sustained economic growth and development to flourish. Economies with higher levels of economic freedom enjoy higher living standards.

This study is based on measures of ten specific freedoms, namely business freedom, trade freeedom, fiscal freedom, government size, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption and labour freedom.

The Telegraph mopes, with some justification, about the tax-and-spend policies that have driven the UK out of the list of most free countries. Perhaps it’ll take comfort in the fact that if the vote-buying billions promised by US presidential candidates become due, the US will probably follow the UK down the rankings.

I’ll try to get around to a more detailed analysis on the South African figures, to pinpoint specific reasons for celebration and concern.