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INTERNATIONAL

The Economic Freedom of the World

Annual Report 2001

James Gwartney, Florida State University & Robert Lawson, Capital University
with Walter Park, American University & Charles Skipton, Florida State University

The Economic Freedom of the World Report is an annual project started with the help of Nobel laureate Milton Friedman. The report uses 21 objective criteria to produce an economic freedom index of the world, published by the Cato Institute, Canada's Fraser Institute and institutes from 50 other countries.

In this year's report, Hong Kong is still the world's freest economy, with Singapore coming a close second. But the United States has dropped from fourth to fifth position, according to the study, which is a comprehensive rating of 123 of the world's economies.

Why are some countries rich while others are poor? The report shows that the more economic freedom a country has, the greater its wealth and economic growth. Economically free countries also score higher on the United Nations Human Development Index. And among developing nations, more freedom translates into less poverty.

The following is an excerpt from Cato Institute Press Release:

April 19, 2001

Cato Institute issues fifth report on global economic freedom

WASHINGTON - Hong Kong is still the world's freest economy, with Singapore coming a close second, according to the Economic Freedom of the World: 2001 Annual Report. But the United States has dropped from fourth to fifth position, according to the study, which is a comprehensive rating of 123 of the world's economies.

The Economic Freedom of the World Report is an annual project started with the help of Nobel laureate Milton Friedman. The report uses 21 objective criteria to produce an economic freedom index of the world, published by the Cato Institute, Canada's Fraser Institute and institutes from 50 other countries.

According to authors James Gwartney and Robert Lawson, the core ingredients of economic freedom are "personal choice, protection of private property, and freedom of exchange." After compiling the economic freedom index, they compared the data with various indicators of social progress. The result: more freedom translates into less poverty, faster economic growth, and higher scores on the United Nations Human Development Index.

"Modern economic growth is primarily about discovery, innovation, and brain power. Thus, the strong relationship between economic freedom and strong growth should not be surprising," says Gwartney.

How did they do? ...

Click here for full Cato Institute Press Release

For more information, see www.freetheworld.com

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Click here for full text of the Economic Freedom of the World report for 2000. (on Fraser Institute web site)