Economic freedom without actual freedom?

Two major right-of-center think-tanks have economic freedom indices: the Heritage Foundation and the Fraser Institute.  Trying to make sense of these rankings is difficult, as some bizarre results have been achieved.

Both indices have Hong Kong ranked as the most economically free country on the planet, with Singapore in second place ahead of New Zealand, Switzerland, Australia, and Canada.

This would be the same Hong Kong and Singapore that are not democratic, but ranked as hybrid regimes between authoritarian regimes and flawed democracies in the Economist Intelligence Unit's Democracy Index, which ranks nations based on their electoral process or pluralism, the functioning of government, political participation, political culture, and civil liberties.  As well, neither of these nations has a free press, with Hong Kong ranked 58th and Singapore ranked 149th on the press freedom index.

On the Fraser Institute's index, Canada -- tied in 5th place with Australia for purported economic freedom -- is barely holding off Bahrain, apparently the 7th-most economically free nation (the Heritage Foundation has Bahrain ranked 12th, ahead of the UK in 14th). Bahrain is an authoritarian regime with one of the lowest democracy indices out there (144/167 countries). It has essentially no press freedom (ranked 165th), and is moderately corrupt (ranked 53rd on the corruption perceptions index).

The United Arab Emirates (UAE) is ranked 11th of the Fraser Institute's list, ahead of Ireland and the UK. The UAE is also an authoritarian state, ranked even lower than Bahrain for its democracy index (149/167 countries) and 114th for press freedom.

Who is in 17th spot for economic freedom according to the Fraser Institute, and in 28th place on the Heritage index?  That would be Qatar, another authoritarian regime with a democracy index rank of 138/167.  Qatar is ranked ahead of the United States (in 18th spot) by the Fraser Institute for economic freedom, with the USA apparently barely holding off two other authoritarian regimes (Kuwait and Oman).  Similarly, Heritage has Qatar ahead of Norway -- which is a full democracy with a free press and negligible corruption.

You cannot have economic freedom without actual freedom.  Governments structure the economic environment by which citizens, companies, and foreign investors do business.  If a nation's citizens cannot express themselves democratically to determine the economic policies under which they live, they do not have true economic freedom.  And one suspects that in these authoritarian regimes, since you cannot democratically choose your government, the odds that you will be able to use your money in any way you see fit (i.e., economic freedom) is effectively nil.

Along the same reasoning, one requires a free press and low corruption as a pre-requisite for economic freedom.  The free press ensures that the public is aware of -- and conversant about -- key economic issues and can make educated decisions on economic policies, as well as work to reduce corruption.  No economic freedom can exist with rampant corruption, since bribes and fund-skimming by government officials severely limit the choices of how financial resources are effectively and independently deployed.

While there is some utility to these indices for reinforcing broad comparisons -- such as whether the USA has greater economic freedom than China or Russia -- there are clearly fatal flaws behind any quantitative measure that places corrupt authoritarian regimes lacking freedom of the press and basic human rights ahead of actual free nations that do hold at least some respect for these freedoms.

Dr. Sierra Rayne writes regularly on environment, energy, and national security topics. He can be found on Twitter at @rayne_sierra.

Two major right-of-center think-tanks have economic freedom indices: the Heritage Foundation and the Fraser Institute.  Trying to make sense of these rankings is difficult, as some bizarre results have been achieved.

Both indices have Hong Kong ranked as the most economically free country on the planet, with Singapore in second place ahead of New Zealand, Switzerland, Australia, and Canada.

This would be the same Hong Kong and Singapore that are not democratic, but ranked as hybrid regimes between authoritarian regimes and flawed democracies in the Economist Intelligence Unit's Democracy Index, which ranks nations based on their electoral process or pluralism, the functioning of government, political participation, political culture, and civil liberties.  As well, neither of these nations has a free press, with Hong Kong ranked 58th and Singapore ranked 149th on the press freedom index.

On the Fraser Institute's index, Canada -- tied in 5th place with Australia for purported economic freedom -- is barely holding off Bahrain, apparently the 7th-most economically free nation (the Heritage Foundation has Bahrain ranked 12th, ahead of the UK in 14th). Bahrain is an authoritarian regime with one of the lowest democracy indices out there (144/167 countries). It has essentially no press freedom (ranked 165th), and is moderately corrupt (ranked 53rd on the corruption perceptions index).

The United Arab Emirates (UAE) is ranked 11th of the Fraser Institute's list, ahead of Ireland and the UK. The UAE is also an authoritarian state, ranked even lower than Bahrain for its democracy index (149/167 countries) and 114th for press freedom.

Who is in 17th spot for economic freedom according to the Fraser Institute, and in 28th place on the Heritage index?  That would be Qatar, another authoritarian regime with a democracy index rank of 138/167.  Qatar is ranked ahead of the United States (in 18th spot) by the Fraser Institute for economic freedom, with the USA apparently barely holding off two other authoritarian regimes (Kuwait and Oman).  Similarly, Heritage has Qatar ahead of Norway -- which is a full democracy with a free press and negligible corruption.

You cannot have economic freedom without actual freedom.  Governments structure the economic environment by which citizens, companies, and foreign investors do business.  If a nation's citizens cannot express themselves democratically to determine the economic policies under which they live, they do not have true economic freedom.  And one suspects that in these authoritarian regimes, since you cannot democratically choose your government, the odds that you will be able to use your money in any way you see fit (i.e., economic freedom) is effectively nil.

Along the same reasoning, one requires a free press and low corruption as a pre-requisite for economic freedom.  The free press ensures that the public is aware of -- and conversant about -- key economic issues and can make educated decisions on economic policies, as well as work to reduce corruption.  No economic freedom can exist with rampant corruption, since bribes and fund-skimming by government officials severely limit the choices of how financial resources are effectively and independently deployed.

While there is some utility to these indices for reinforcing broad comparisons -- such as whether the USA has greater economic freedom than China or Russia -- there are clearly fatal flaws behind any quantitative measure that places corrupt authoritarian regimes lacking freedom of the press and basic human rights ahead of actual free nations that do hold at least some respect for these freedoms.

Dr. Sierra Rayne writes regularly on environment, energy, and national security topics. He can be found on Twitter at @rayne_sierra.

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