Economic freedom is the key to greater opportunity and an improved quality of life. It’s the freedom to choose how to produce, sell, and use your own resources, while respecting others’ rights to do the same. While a simple concept, it is an engine that drives prosperity in the world and is the difference between why some societies thrive while others do not.
Why is it important?
It is important because it affects every aspect of an individual’s life. Living in a society with high levels of economic freedom leads to higher incomes, lower poverty, less unemployment, longer life expectancy, and cleaner environments, among a host of other benefits. It improves well-being and leads to a higher quality of life.
How is it measured?
The Fraser Institute’s annual report, The Economic Freedom of the World Report, is produced in partnership with Florida State University and Southern Methodist University, and it analyzes five subcomponents to measure a country’s level of freedom. These subcomponents include the size of government based on expenditures and taxes; the legal structure and its protection of property rights; access to sound money; freedom to trade internationally; and regulation of credit, labor, and business. The Fraser Institute also maintains FreetheWorld.com, which contains all previous economic freedom research including regional and sub-national reports and downloadable data sets.
The Heritage Foundation, in partnership with the Wall Street Journal, publishes the Index of Economic Freedom, which evaluates various subcomponents, including levels of business, trade, fiscal, monetary, and labor freedom; government spending; and property rights.