WASHINGTON, JAN. 20, 2010--North America is the world leader in economic freedom, with two of its three countries listed among the 10 freest in the 2010 "Index of Economic Freedom," published annually by The Wall Street Journal and The Heritage Foundation.
Canada enjoyed the highest ranking within the region and finished seventh in the world, while the United States dropped to eighth worldwide.
One reason the region does so well is the North America Free Trade Agreement. "NAFTA has been a positive force, enhancing economic freedom in the North America region and connecting more than 400 million people in an economic area with about one-third of the world's total GDP," the editors write.
The region also highlighted different responses to the year's global economic crisis. "Canada's high level of economic freedom, coupled with its sound and prudent banking sector, has enabled its economy to emerge from the global downturn relatively unscathed," the editors write. "By contrast, the U.S. dropped from the 'free' to the 'mostly free' category. The U.S. government's policy responses to the crisis and economic slowdown have been far-reaching and implemented at the cost of curtailing economic freedom."
To compile the Index, the authors measured 183 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 zero to 100. Four countries couldn't be measured because of a lack of reliable data.
The 10 freedoms 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 were averaged to produce the overall Index score.
Worldwide, the average rating for economic freedom dropped slightly this year as many countries scrambled to deal with recession. However, it's important they take the correct steps.
"The 2010 Index provides strong evidence that economic freedom has far-reaching positive impacts on various aspects of human development," the editors write. "Economic freedom correlates with poverty reduction, a variety of desirable social indicators, democratic governance, and environmental sustainability."
Of the 179 countries ranked only seven were classified as "free" (a score of 80 or higher). Another 23 were rated "mostly free" (70-79.9). The bulk of countries--113 economies--were found to be either "moderately free" (60-60.9) or "mostly unfree" (50-50.9). The remaining 36 countries have "repressed" economies, with total freedom scores below 50.
The 2010 Index was edited by Ambassador Terry Miller, Director of Heritage's Center for International Trade and Economics, and Dr. Kim Holmes, Heritage's Vice President for foreign affairs. Copies of the 2010 Index (TK pp., US$ TK) can be ordered at heritage.org/index or by calling 1-800-975-8625. Additionally the full text, charts and graphs, is available via the Internet at www.heritage.org/index.
About The Wall Street Journal
Founded in 1889, The Wall Street Journal, the flagship publication of Dow Jones & Company is the world's leading business publication and holds 33 Pulitzer Prizes for outstanding journalism. The Wall Street Journal has a print and online circulation of more than 2 million, reaching the nation's top business and political leaders, as well as investors across the country. The Wall Street Journal boasts the largest individually paid circulation out of the top 25 U.S. newspapers. Other publications that are part of The Wall Street Journal franchise, with a global audience of 3.8 million, include The Wall Street Journal Asia and The Wall Street Journal Europe. The Wall Street Journal Online at WSJ.com is the leading provider of business and financial news and analysis on the Web with more than one million subscribers and 26 million users per month. WSJ.com is the flagship site of The Wall Street Journal Digital Network, which also includes MarketWatch.com, Barrons.com, AllThingsD.com and FINS.com. In 2009, the Journal was ranked No. 1 in BtoB's Media Power 50 for the 10th consecutive year. The Wall Street Journal Radio Network services news and information to more than 350 radio stations in the U.S.
About The Heritage Foundation
The Heritage Foundation is the nation's most broadly supported public policy research institute, with more than 582,000 individual, foundation and corporate donors. Founded in 1973, Heritage now has a staff of 244 and an expense budget of $61 million.