The Decline of Global Economic Freedom: A Troubling Trend Observed Over Four Years
The Decline of Global Economic Freedom: A Troubling Trend Observed Over Four Years
The annual Economic Freedom of the World report, published by the Fraser Institute, highlights a concerning downturn in global economic freedom for the fourth year in a row as of 2023. This trend is unprecedented since the Institute began tracking the metrics over 25 years ago. According to Matthew Mitchell, a senior fellow at the Fraser Institute and a contributor to the report, economic freedom reached its peak in 2019 and has steadily declined ever since.
What is Economic Freedom?
Economic freedom refers to the degree of individual autonomy in making choices regarding spending, employment, and entrepreneurship. It is considered a cornerstone of prosperity. The criteria for measuring economic freedom encompass various aspects, including openness to trade, tax and regulatory burdens, government spending, and the fiscal health of a nation’s currency.
Where Do We Stand?
The 2023 report identifies Hong Kong as the most economically free region globally, despite its declining score in recent years. Following Hong Kong are Singapore, New Zealand, Switzerland, and the United States, in that order. It is crucial to note that the data does not yet reflect impacts from any current trade disputes affecting the U.S. economy; however, the report does contemplate potential implications of ongoing trade conflicts on economic freedom.
The rankings of other notable countries show:
- - United Kingdom: 13th
- - Germany: 15th
- - Japan: 17th
- - Korea: 38th
- - France: 44th
- - Italy: 46th
- - Indonesia: 65th
- - Mexico: 70th
- - India: 86th
- - Brazil: 87th
- - China: 108th
- - Russia: 148th
In stark contrast, the lowest-ranked countries on the list include Chad, Libya, Syria, Argentina, Myanmar, Iran, Algeria, Sudan, Zimbabwe, and Venezuela.
The Consequences of Declining Economic Freedom
Individuals residing in nations with higher economic freedom experience significant benefits, including enhanced prosperity, greater political and civil liberties, and improved longevity. For instance, in 2023, the per capita GDP in countries ranking among the top 25% for economic freedom was approximately $66,434, compared to just $10,751 for those in the lowest 25%.
Moreover, poverty rates are notably lower in nations with more economic freedom. In the wealthiest quarter of such nations, only 2% of individuals live in extreme poverty (defined as living on less than $3.65 daily), whereas 52% of the population in the least free quartile finds themselves in the same dire economic situation.
Additionally, life expectancy averages at 79 years in the most economically free countries, in contrast to merely 62 years in the least free.
Mitchell emphasizes that where individuals are granted the freedom to pursue their own economic opportunities and decisions, they tend to lead happier, healthier, and more prosperous lives.
Conclusion
As the trends reveal a continued decrease in global economic freedom, it becomes increasingly imperative for policymakers to address the underlying factors contributing to this decline. The future well-being of individuals and nations alike hinges on returning to policies that promote freedom and autonomy in economic matters.
For media inquiries or further information, contact Mark Hasiuk, Senior Media Relations Specialist at the Fraser Institute.
Ultimately, understanding and improving economic freedom is crucial not just for economic growth, but for the holistic well-being of societies around the world.
Topics Policy & Public Interest）
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