New Delhi: India ranks 79 out of 162 countries and territories included in the Economic Freedom of the World: 2019 Annual Report, released by the Centre for Civil Society (CCS) – India’s leading think-tank advocating social change through public policy, in conjunction with Canada’s Fraser Institute. Last year, India ranked 96.
‘India’s jump from the 96 to 79 spot is encouraging news to its sluggish economy. It is well established that economic freedom fosters economic growth by affecting incentives leading to efficient use of resources. The freedom to choose and supply resources, competition in business, openness to trade, and legally protected property rights are central ingredients for economic progress.’ said Sudhanshu Neema, Lawyer and Economist, Centre for Civil Society.
Hong Kong and Singapore again top the index; continuing their streak as 1st and 2nd respectively, while New Zealand, Switzerland, United States, Ireland, United Kingdom, Canada, Australia, and Mauritius round out the top 10.
The report was prepared by James Gwartney, Florida State University; Robert A. Lawson and Ryan Murphy of Southern Methodist University; and Joshua Hall, West Virginia University.
It’s based on data from 2017 (the most recent year of available comparable data) and measures the economic freedom (levels of personal choice, ability to enter markets, the security of privately owned property, rule of law, etc.) by analyzing the policies and institutions of 162 countries and territories.
The 10 lowest-rated countries are Iraq, Republic of Congo, Egypt, Syria, Democratic Republic of Congo, Angola, Algeria, Sudan, Libya, and lastly Venezuela. Some despotic countries such as North Korea and Cuba can’t be ranked due to lack of data.
The rankings of some other major countries are Japan (17th), Germany (20th), Italy (46th), France (50th), Mexico (76th), India (79th), Russia (85th), China (113th), and Brazil (120th).
According to research in top peer-reviewed academic journals, people living in countries with high levels of economic freedom enjoy greater prosperity, more political and civil liberties, and longer lives.
For example, in the top quartile of economic freedom had an average per-capita GDP of$36,770$40,376 in 2017, compared to $6,140$5,649 for bottom quartile nations (PPP constant 20117 US$). And poverty is much reduced. In the top quartile, 1.8 percent of the population experience extreme poverty (US$1.90 a day) compared to 27.2 percent in the lowest quintile.
Life expectancy is 79.5 years in the top quartile of countries compared to 64.4 years in the bottom quartile.
“Where people are free to pursue their own opportunities and make their own choices, they lead more prosperous, happier and healthier lives,” said Fred McMahon, Dr. Michael A.Walker Research Chair in Economic Freedom with the Fraser Institute.
The Fraser Institute produces the annual Economic Freedom of the World report in cooperation with the Economic Freedom Network, a group of independent research and educational institutes in nearly 100 countries and territories. It’s the world’s premier measurement of economic freedom, measuring and ranking countries in five areas: the size of government, legal structure, and security of property rights, access to sound money, freedom to trade internationally and regulation of credit, labour, and business.
See the full report at www.fraserinstitute.org/ economic-freedom
India scores in key components of economic freedom (from 1 to 10 where a higher value indicates a higher level of economic freedom):
- Size of government: changed to 8.22 from 8.21 in the last year’s report
- Legal system and property rights: changed to 5.17 from 5.10
- Access to sound money: changed to 8.37 from 8.10
- Freedom to trade internationally: changed to 6.08 from 5.56
- Regulation of credit, labour and business: changed to 6.69 from 6.46