Wednesday, September 17, 2008
African nations continue to outperform their western counterparts, but in the wrong direction. 9 out of the 10 nations with the lowest levels of economic freedom are resident in Africa.
The 10 nations with the lowest levels of economic freedom are: Zimbabwe (2.67), Angola (4.10), Myanmar (4.19), the Republic of Congo (4.64), Niger (4.67), Venezuela (4.67), Guinea-Bissau (5.01), Central Africa Republic (5.01), Chad (5.12), Rwanda (5.23), and Burundi (5.23).
Burkina Faso for instance was rated 123rd freest economy in the world, while Hong Kong and Singapore took the first and second positions.
The authors of the 2008 Economic Freedom of the World report conclude that the institutions and policies of most sub-Saharan African nations are highly inconsistent with economic growth. The failure of the legal system to protect property rights, the roadblocks imposed by trade restrictions, and the heavy regulation and administrative costs imposed on business undermine economic growth because they stifle the gains from trade, entrepreneurship, and investment. Given that most of the sub-Saharan countries are relatively small, the high trade barriers are particularly damaging. In order to encourage economic growth in Africa, Norton and Gwartney recommend that African nations reduce and eliminate trade barriers and business regulations; improve their legal system; and develop an interstate highway system through Africa.
About the Economic Freedom Index
Economic Freedom of the World measures the degree to which the policies and institutions of countries are supportive of economic freedom. This year’s publication ranks 141 nations representing 95% of the world’s population for 2006, the most recent year for which data are available. The report also updates data in earlier reports in instances where data have been revised. For more information on the Economic Freedom Network, data sets, and previous Economic Freedom of the World reports, visit http://www.freetheworld.com/