January 15, 2008 | News Releases on Asia
WASHINGTON, JAN. 15, 2008--The economies of North and South America earned an average economic freedom score of 61.6, slightly ahead of the world average (60.3), according to the 2008 "Index of Economic Freedom," published annually by The Wall Street Journal and The Heritage Foundation.
The Index reflects data compiled in 10 key categories of economic freedom. Again this year, the United States led the region in economic freedom and finished fifth in the world. It's joined on the Index's global top 10 list by Canada (7th) and Chile (8th).
But there was more bad news than good. "Across the region, the reality is that economies are stagnating," warn Index editors Kim Holmes, Edwin Feulner and Mary Anastasia O'Grady.
Only 12 economies in the Americas boosted their level of economic freedom in this edition of the Index, while 17 lost ground. "The lack--and in some cases, erosion--of economic freedom in the Americas reflects reversals of free-market policies and a failure by some governments to persevere in pursuing economic freedom," the editors write.
Most regional economies are bunched up in the middle of the Index's scale. All but six received an economic freedom score between 50 percent and 80 percent, with roughly half considered "moderately free." Two (the U.S. and Canada) were "free," and four (Guyana, Haiti, Venezuela and Cuba) were "repressed" economies. Corruption, inflation and weak property rights are the major trouble areas for regional economies, the editors note.
To compile the Index, the editors measured 157 countries across 10 specific factors of economic freedom. The higher the score, the lower the level of government interference. All countries were graded on a scale of 0 to 100.
The 10 freedoms measured are: business freedom, trade freedom, fiscal freedom, government size, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption and labor freedom. Ratings in each category are averaged to produce the overall Index score.
This year's Index aims to be the most precise measure of economic freedom ever published. The editors fine-tuned a methodology first employed last year to grade each economy in the world. "The methodology has been vetted with an academic advisory board and should now even better reflect the details of each country's economic policies," they write.
Worldwide, the average rating for economic freedom held essentially steady "while progressing more slowly than one might hope," the editors write. Of the 157 countries ranked, only seven are classified as "free" (a score of 80 or higher). Another 23 are "mostly free" (70-79.9). The bulk of countries--103 economies--are either "moderately free" (60-60.9) or "mostly unfree" (50-50.9). Some 24 countries have "repressed" economies, with total freedom scores below 50 percent.
This is the 14th consecutive year The Heritage Foundation and The Wall Street Journal have published the Index. It's edited by Kim Holmes, Heritage's vice president for foreign affairs, Edwin Feulner, Heritage's president, and Mary Anastasia O'Grady, a member of the Journal's editorial board and editor of the "Americas" column.
Copies of the 2008 Index (410 pp., US$24.95) can be ordered at heritage.org/index or by calling 1-800-975-8625 and are available in English or Spanish. Additionally the full text, along with all charts and graphs, will be available via the Internet at www.heritage.org/index.
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