EconomyPolitics 3rd annual index of Economic Efficiency of the World

8/3/2019 EconomyPolitics 3rd annual index of Economic Efficiency of the World

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Updated Jan 15, 2011

www.economypolitics.com

EconomyPolitics 3rd annual index of

Economic Efficiency of the World

By Taylor R. Cottam, CFA, FRM


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EconomyPolitics 3rd annual Index of Economic Efficiency of the WorldThe top ten countries in terms of economic efficiency for 2011:

This is the first in a three part series where we identify the most attractive international investment

opportunities for the next ten years. We start out by looking at economic efficiency, i.e. the

fundamental freedoms and legal framework, which facilitates successful investing.

In doing country analysis for international investments, it is often a first step to look at sovereign bond

ratings from Moody's, Fitch or S&P. However, many smaller developing countries get very little if any

play at the agencies. CDS spreads, another measure of investor risk only covers 80 countries. Our index

covers 127 countries. To do so, we have looked at business and freedom indexes which assign values to

sovereign attributes to gauge risk and assess opportunity. These indices attempt to measure economic

freedom and a legal clarity.

There are plenty of indices by many different sources, each one looks at important factors which could

influence returns and hurdle rates. But which index do you use? We have looked into four of such

indices and compiled an index of indices to measure efficiency.

I have included information on five of such indices and compiled our own index of economic

efficiency. The indices include:

Heritage Foundation: Index of Economic Freedom Fraser Institute: Economic Freedom of the World World Economic Forum: Global Competitiveness Report World Bank: Doing Business Euromoney Country Risk


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EconomyPolitics Methodology

To come up with an effective way of comparing the different indices, we first eliminated any countries

that were not covered on all indices. We then scaled them, with the lowest common country rank set to

zero (which happens to be Zimbabwe) and the highest country set to one. Then their relative positions

are weighted by the corresponding score, not the ranking. The indexes are all given equal weighting.

That score is the EconomyPolitics index of Economic Efficiency. The results can be seen below:

Rank Country Heritage Fraser WEF World

Bank

Euro-

money

Average Change

in Rank

1 Singapore 96.3% 93.3% 95.4% 100.0% 94.3% 0.959 +1

2 Hong Kong 100.0% 100.0% 84.2% 96.9% 89.4% 0.941 -1

3 Switzerland 88.5% 80.1% 100.0% 71.1% 96.4% 0.872 +0

4 Denmark 83.6% 69.8% 85.9% 91.3% 92.4% 0.846 +2

5 New Zealand 89.1% 83.6% 66.4% 94.6% 89.0% 0.845 0

6 Canada 86.8% 75.7% 83.0% 78.3% 92.8% 0.833 -2

7 United States 82.4% 71.4% 87.1% 91.0% 82.0% 0.828 0

8 Australia 89.3% 79.1% 73.9% 82.0% 88.8% 0.826 0

9 Finland 76.8% 71.2% 88.8% 83.6% 92.4% 0.826 +1

10 Sweden 73.7% 64.1% 94.6% 82.4% 91.6% 0.813 +1

11 United Kingdom 77.5% 73.6% 85.5% 86.9% 80.3% 0.808 -2

12 Norway 71.3% 65.3% 76.8% 87.4% 100.0% 0.802 0

13 Germany 73.5% 68.4% 86.3% 71.7% 88.8% 0.778 +3

14 Netherlands 77.8% 65.7% 86.3% 65.2% 91.7% 0.773 -1

15 Japan 75.0% 68.2% 85.9% 71.1% 72.6% 0.746 -1

16 Austria 73.7% 69.4% 75.1% 64.0% 88.0% 0.740 +2

17 Luxembourg 80.0% 69.2% 70.5% 54.7% 94.9% 0.739 0

18 Taiwan 72.0% 66.7% 80.1% 69.8% 80.0% 0.737 +2

19 South Korea 70.6% 65.7% 70.1% 84.7% 70.6% 0.723 +2

20 Chile 81.8% 74.8% 56.8% 62.7% 79.9% 0.712 -1

21 Belgium 71.2% 62.3% 77.6% 64.7% 75.3% 0.702 +1

22 France 62.9% 62.5% 75.1% 66.4% 81.1% 0.696 +1

23 Ireland 83.7% 66.9% 59.8% 81.5% 55.6% 0.695 -8

24 United Arab Emirates 67.6% 70.2% 64.7% 63.5% 65.9% 0.664 +3

25 Estonia 78.6% 69.8% 53.5% 71.7% 55.8% 0.659 +0

26 Malaysia 65.4% 52.7% 72.6% 73.4% 62.7% 0.654 +12

27 Iceland 68.2% 55.4% 58.9% 83.1% 56.3% 0.644 +1

28 Oman 70.6% 66.1% 54.4% 57.0% 66.1% 0.628 +7

29 Cyprus 75.7% 69.6% 42.7% 59.4% 66.5% 0.628 -3

30 Israel 68.6% 49.7% 72.2% 58.4% 64.4% 0.627 -1

31 Bahrain 82.2% 71.2% 50.2% 62.3% 46.9% 0.626 -7

32 Mauritius 80.0% 72.8% 40.7% 72.5% 44.7% 0.622 +7

33 Lithuania 72.8% 67.3% 44.8% 68.8% 52.0% 0.611 -1

34 Slovakia 70.1% 70.6% 35.7% 53.3% 72.5% 0.604 -4

35 Spain 71.2% 59.0% 50.2% 59.3% 61.6% 0.603 -436 Czech Republic 71.4% 61.9% 49.4% 43.5% 73.7% 0.600 -2

37 Thailand 63.0% 56.6% 49.4% 75.7% 52.8% 0.595 -4

38 Slovenia 62.9% 54.8% 40.2% 62.9% 73.9% 0.589 -1

39 Kuwait 63.3% 61.3% 53.5% 43.7% 68.5% 0.581 +1

40 Poland 62.1% 59.2% 46.9% 44.4% 69.8% 0.565 +5

41 Hungary 65.8% 69.8% 42.7% 54.3% 49.8% 0.565 +2

42 Georgia 71.4% 66.5% 25.7% 77.7% 40.5% 0.564 -1

43 Peru 68.8% 65.5% 36.5% 57.2% 53.1% 0.562 -1

44 Portugal 62.0% 57.8% 44.4% 67.6% 48.5% 0.561 -8


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45 Panama 63.3% 67.5% 42.3% 47.5% 56.0% 0.553 +3

46 Latvia 64.6% 57.6% 37.8% 70.2% 45.8% 0.552 0

47 Mexico 67.6% 54.0% 39.8% 49.2% 57.0% 0.535 -3

48 South Africa 60.1% 48.9% 41.9% 59.0% 57.2% 0.534 -1

49 Colombia 67.9% 43.2% 36.1% 54.3% 58.8% 0.521 +4

50 Botswana 69.1% 55.8% 29.9% 51.6% 53.5% 0.520 +12

51 Bulgaria 63.3% 66.1% 34.4% 48.3% 45.7% 0.516 -1

52 Italy 56.5% 55.4% 45.6% 36.5% 63.8% 0.516 -353 Turkey 62.3% 54.0% 39.4% 44.9% 54.2% 0.510 -1

54 Macedonia 64.9% 56.8% 29.9% 69.6% 33.0% 0.509 +6

55 China 44.2% 47.7% 65.1% 35.7% 60.5% 0.507 -4

56 Kazakhstan 59.2% 58.6% 35.3% 55.1% 38.9% 0.494 0

57 Tunisia 53.8% 47.1% 47.3% 60.0% 37.0% 0.490 -3

58 Uruguay 70.9% 57.2% 38.2% 33.3% 44.7% 0.489 +5

59 Costa Rica 66.9% 62.7% 39.0% 23.3% 46.9% 0.478 +2

60 Jordan 69.2% 57.2% 35.7% 36.2% 40.4% 0.477 -5

61 Romania 63.0% 60.9% 31.1% 41.6% 41.8% 0.477 -3

62 Armenia 70.4% 62.3% 23.2% 48.4% 32.9% 0.474 -5

63 Montenegro 59.8% 64.7% 39.0% 48.8% 21.5% 0.468 +9

64 Croatia 57.7% 48.3% 31.1% 43.1% 49.8% 0.460 +1

65 Azerbaijan 55.6% 49.1% 40.7% 44.6% 34.9% 0.450 +2

66 Namibia 60.1% 56.4% 27.8% 40.1% 39.1% 0.447 -2

67 Rwanda 60.1% 44.8% 35.7% 59.2% 20.5% 0.441 +22

68 Albania 62.0% 65.7% 30.3% 35.6% 26.5% 0.440 -2

69 Trinidad and Tobago 65.7% 59.0% 27.8% 42.2% 24.2% 0.438 N/A

70 Brazil 50.6% 42.8% 41.1% 20.5% 63.1% 0.436 +2

71 Mongolia 55.3% 65.1% 22.0% 38.8% 35.9% 0.434 +10

72 El Salvador 69.1% 62.3% 23.2% 25.9% 32.7% 0.426 -12

73 Sri Lanka 51.8% 41.4% 41.5% 35.1% 43.3% 0.426 +6

74 Indonesia 50.1% 49.1% 43.6% 19.2% 49.7% 0.423 -3

75 Ghana 55.2% 55.4% 13.3% 46.5% 39.2% 0.419 +7

76 Morocco 55.5% 42.2% 34.4% 35.3% 41.6% 0.418 0

77 Guatemala 58.9% 60.6% 27.8% 33.4% 24.4% 0.410 +3

78 Russia 42.0% 50.1% 36.5% 24.2% 48.7% 0.403 -4

79 India 48.1% 47.1% 40.2% 14.7% 50.0% 0.400 -1

80 Zambia 55.6% 64.5% 14.1% 37.7% 27.2% 0.398 +5

81 Vietnam 43.6% 48.7% 37.8% 34.5% 33.5% 0.396 -4

82 Jamaica 64.5% 60.6% 17.8% 38.4% 15.1% 0.393 -7

83 Philippines 50.4% 48.3% 31.1% 17.3% 44.8% 0.384 +3

84 Serbia 53.1% 47.9% 22.8% 35.3% 31.5% 0.381 -1

85 Paraguay 59.5% 50.5% 8.3% 34.2% 35.7% 0.376 +2

86 Greece 56.5% 50.1% 24.5% 33.2% 22.2% 0.373 -17

87 Kenya 52.2% 58.6% 20.3% 26.1% 29.0% 0.372 +4

88 Honduras 54.0% 60.4% 27.0% 17.7% 26.9% 0.372 0

89 Belize 61.7% 58.2% 7.9% 35.1% 20.7% 0.367 N/A

90 Egypt 54.7% 47.5% 22.8% 27.9% 29.2% 0.364 -19

91 Dominican Republic 56.1% 52.7% 16.6% 29.9% 23.2% 0.357 +4

92 Moldova 49.7% 44.8% 23.2% 36.9% 20.3% 0.350 +1

93 Uganda 58.6% 59.4% 9.5% 20.3% 26.5% 0.349 -3

94 Kyrgyzstan 57.7% 55.4% 5.0% 43.4% 9.2% 0.341 -9

95 Nicaragua 54.3% 55.6% 11.6% 21.9% 18.4% 0.323 -1

96 Argentina 43.8% 36.9% 27.4% 24.6% 28.6% 0.323 0

97 Tanzania 51.6% 39.8% 9.5% 20.8% 30.0% 0.303 +4

98 Nigeria 51.2% 41.4% 5.0% 15.4% 33.2% 0.292 +9

99 Bosnia and Herzegovina 52.4% 43.6% 20.7% 16.9% 12.2% 0.292 0

100 Bangladesh 45.7% 42.4% 16.6% 19.9% 20.3% 0.290 0

101 Ethiopia 42.0% 31.2% 17.8% 30.8% 20.7% 0.285 +9

102 Pakistan 48.8% 39.6% 10.4% 26.7% 15.3% 0.282 -5


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103 Ecuador 37.0% 39.8% 20.3% 19.9% 20.4% 0.275 +5

104 Malawi 49.9% 42.4% 10.4% 11.9% 21.8% 0.273 +5

105 Iran 29.6% 42.2% 38.6% 10.9% 14.7% 0.272 -2

106 Bolivia 41.3% 44.4% 20.3% 6.0% 23.2% 0.271 -4

107 Madagascar 57.8% 44.8% 1.2% 13.5% 17.9% 0.271 -2

108 Guyana 40.4% 41.0% 16.6% 27.9% 8.8% 0.269 -10

109 Ukraine 35.1% 32.9% 27.8% 7.4% 28.0% 0.262 -5

110 Algeria 44.8% 26.0% 26.1% 6.3% 23.7% 0.254 +1111 Syria 43.2% 35.5% 21.6% 12.7% 13.3% 0.253 +3

112 Burkina Faso 57.0% 37.7% -3.3% 11.0% 21.0% 0.247 +1

113 Senegal 49.7% 33.5% 15.4% 4.8% 17.3% 0.241 -1

114 Mali 50.6% 38.5% 2.5% 10.7% 15.5% 0.236 +1

115 Cameroon 43.9% 38.3% 11.6% 5.1% 16.0% 0.230 +3

116 Nepal 41.4% 28.8% 5.8% 29.0% 8.5% 0.227 +3

117 Benin 50.1% 38.1% 18.7% -3.6% 10.1% 0.227 -1

118 Mozambique 51.3% 29.4% -0.8% 11.3% 20.4% 0.223 -12

119 Lesotho 37.6% 41.2% -2.9% 8.9% 22.5% 0.214 -2

120 Cte d'Ivoire 49.3% 36.1% 1.7% 0.9% 10.8% 0.197 0

121 Haiti 44.4% 56.0% -17.8% 0.0% -0.9% 0.163 N/A

122 Mauritania 44.4% 40.0% -5.4% 8.1% -17.6% 0.139 0

123 Angola 35.7% 13.8% -15.4% -0.1% 25.9% 0.120 +1

124 Venezuela 22.9% 4.1% 7.5% -5.5% 25.2% 0.108 -1

125 Burundi 40.7% 21.1% -15.8% -1.1% -13.9% 0.062 0

126 Chad 34.3% 25.2% -19.1% -10.7% -6.3% 0.047 0

127 Zimbabwe 0.0% 0.0% 0.0% 0.0% 0.0% 0.000 0

Whole world becoming less efficient?

The absolute scores for the EconomyPolitics index of economic efficiency have dropped a full 8.50%.

Much of the changes come from differences in the indexes in the World Economic Forum, Euromoney,

and World Bank which went down across the board by about 15%, 13% and 9% respectively. That is

partly related to the way that we calculated the numbers. Last year we were anchoring every index by

the lowest country in each index to the highest country from zero to 100 percent. This year, we are

weighing all indexes by the lowest common country in each index which is common among every index.

This year, that just happens to be Zimbabwe, which every index has chosen as the lowest scoring

country which is common among all indexes.

However, a strong case could be made that even in that case, countries are in a worse position than

they were previously. Fraser was anchored by Zimbabwe last year too and they are still 5% worse than

before. European countries have been hit hard with the financial crisis, as have many countries in the

Arab world. That would seem to make sense given the level of confusion that has come from Europe in

reaction to the financial crisis, and the uncertainty surrounding the Arab flu.

Biggest Positive Changes

The biggest positive movers in ranking come from the developing world. Africa makes big gains in

ranking with six out of ten of the top movers coming from the region. Asia has also made some gains in

economic efficiency with Malaysia, Mongolia and Oman climbing the ranks.


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2011 2012 Change YOY

Country Rank Average Rank Average Rank Average

Rwanda 89 0.437 67 0.441 22 0.003

Malaysia 38 0.654 26 0.654 12 -0.000

Botswana 62 0.551 50 0.520 12 -0.032

Mongolia 80 0.481 71 0.434 10 -0.047Montenegro 72 0.502 63 0.468 9 -0.034

Nigeria 105 0.358 98 0.292 9 -0.066

Ethiopia 108 0.353 101 0.285 9 -0.068

Oman 35 0.661 28 0.628 7 -0.033

Mauritius 39 0.649 32 0.622 7 -0.027

Ghana 81 0.477 75 0.419 7 -0.058

When we look at the changes to the absolute score, we get a slightly different result. Rwanda and

Malaysia are still show positive relative changes, however, Germany and the Nordic countries showpositive relative gains. Asia also makes some gains with Hong Kong, Singapore and Taiwan which have

all moved up in their relative absolute change.



Singapore 2 0.951 1 0.959 1 0.008

Rwanda 89 0.437 67 0.441 22 0.003

Malaysia 38 0.654 26 0.654 12 -0.000

Switzerland 3 0.877 3 0.872 0 -0.005

Finland 10 0.834 9 0.826 1 -0.009

Hong Kong 1 0.957 2 0.941 -1 -0.016

Sweden 11 0.832 10 0.813 1 -0.019

Germany 16 0.797 13 0.778 3 -0.019

Denmark 6 0.869 4 0.846 2 -0.023

Taiwan 20 0.761 18 0.737 2 -0.023

Biggest Negative Changes

The biggest negative movers should not be a big surprise. Egypt and Greece have been stricken with

uncertainty and riots, not exactly the recipe for an efficient economy. Portugal, Ireland and Bahrainhave been staples of the evening news due to financial and political difficulties and lack of transparency.



Egypt 69 0.511 90 0.364 -19 -0.147


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Greece 68 0.523 86 0.373 -17 -0.150

El Salvador 59 0.555 72 0.426 -12 -0.128

Mozambique 104 0.359 118 0.223 -12 -0.136

Guyana 96 0.410 108 0.269 -10 -0.141

Kyrgyzstan 83 0.470 94 0.341 -9 -0.129

Portugal 36 0.658 44 0.561 -8 -0.097

Ireland 15 0.797 23 0.695 -8 -0.102

Bahrain 24 0.726 31 0.626 -7 -0.100

Jamaica 74 0.496 82 0.393 -7 -0.103

From a change in their score, the stories are similar. Venezuelas score has slipped even further, but

since they are already near the bottom of the rankings, the change in ranking cant change much.



Greece 68 0.523 86 0.373 -17 -0.150

Egypt 69 0.511 90 0.364 -19 -0.147

Guyana 96 0.410 108 0.269 -10 -0.141

Mozambique 104 0.359 118 0.223 -12 -0.136

Pakistan 95 0.411 102 0.282 -5 -0.130

Kyrgyzstan 83 0.470 94 0.341 -9 -0.129

Venezuela 120 0.237 124 0.108 -1 -0.128

El Salvador 59 0.555 72 0.426 -12 -0.128

Bosnia and

Herzegovina

97 0.399 99 0.292 0 -0.107

Ukraine 102 0.368 109 0.262 -5 -0.105

Regional Differences

Culture matters within countries as well as regions. We have split up the globe into spheres of

influence. The region that is most free on the globe is North America. With only two countries in this

region, it is politically less diverse than other regions, especially Europe. Oceania follows North America

in economic efficiency.

Europe follows with its 38 countries. It is very politically and culturally diverse with Northern and

Western European countries scoring higher than the Southern and Eastern European countries. It is a

disappointment to have the largest country in the region, Russia, near the bottom of the region.

The Middle East is in a statistical dead heat with Asia for the middle of the pack. South Asia, with India,

Pakistan and Bangladesh bring down the Asia index. China is just above the regional average. The

Middle East is trying to shed is authoritarian reputation and is showing big increases in economic


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freedom and opportunity. Many Middle Eastern countries are opening economically, including, Bahrain,

United Arab Emirates, Oman and Israel.

Latin America follows the Middle East. Many in the region have been hoodwinked or bought off by the

regional menace Hugo Chavez. Now there are a number of his sympathizers in power which is bringing

the scores down considerably. There is hope in the Pacific with Chile, Peru, Colombia and Panama allshowing significant improvement. Brazil, even though there economy has been surging recently, seems

to score relatively poor and is placed even below Dominican Republic.

The biggest disappointment of course is the region with a whole host of pariahs, Sub-Saharan Africa. In

fact, 18 of the bottom 26 countries belong to the region. There are some bright spots. Mauritius, an

island off the coast of Madagascar, has proven to be investor friendly and is seen by many as a lassiez-

faire gateway to the continent. South Africa, Botswana and Rwanda are sowing the seeds for future

economic development and prosperity. The problem is, for every Botswana and Rwanda there is a

Zimbabwe, Congo, Burundi, Angola, etc.

Regional Data

North America average 0.830 this year vs. 0.871 last year.

Rank Country EP Average

6 Canada 0.833

7 United States 0.828

Oceania average 0.763 vs. 0.797 last year.


1 Singapore 0.959

5 New Zealand 0.845

8 Australia 0.826

74 Indonesia 0.423

Europe average 0.606 vs. 0.660 last year (Bosnia and Herzegovina removed from average

calculations because they were not included last year).


3 Switzerland 0.872


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4 Denmark 0.846

9 Finland 0.826

10 Sweden 0.813

11 United Kingdom 0.808

12 Norway 0.802

13 Germany 0.778

14 Netherlands 0.773

16 Austria 0.740

17 Luxembourg 0.739

21 Belgium 0.702

22 France 0.696

23 Ireland 0.695

25 Estonia 0.659

27 Iceland 0.644

29 Cyprus 0.628

33 Lithuania 0.61134 Slovakia 0.604

35 Spain 0.603

36 Czech Republic 0.600

38 Slovenia 0.589

40 Poland 0.565

41 Hungary 0.565

44 Portugal 0.561

46 Latvia 0.552

51 Bulgaria 0.516

52 Italy 0.51654 Macedonia 0.509

61 Romania 0.477

63 Montenegro 0.468

64 Croatia 0.460

68 Albania 0.440

78 Russia 0.403

84 Serbia 0.381

86 Greece 0.373

92 Moldova 0.350

99 Bosnia and

Herzegovina

0.292

109 Ukraine 0.262

Asia average 0.505 vs. 0.572.


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2 Hong Kong 0.941

15 Japan 0.746

18 Taiwan 0.737

19 South Korea 0.723

26 Malaysia 0.654

37 Thailand 0.595

55 China 0.507

56 Kazakhstan 0.494

71 Mongolia 0.434

73 Sri Lanka 0.426

79 India 0.400

81 Vietnam 0.396

83 Philippines 0.384

94 Kyrgyzstan 0.341100 Bangladesh 0.290

102 Pakistan 0.282

116 Nepal 0.227

Middle East average 0.478 vs. 0.558 last year


24 United Arab Emirates 0.664

28 Oman 0.628

30 Israel 0.627

31 Bahrain 0.626

39 Kuwait 0.581

42 Georgia 0.564

53 Turkey 0.510

57 Tunisia 0.490

60 Jordan 0.477

62 Armenia 0.474

65 Azerbaijan 0.450

76 Morocco 0.418

90 Egypt 0.364

105 Iran 0.272

110 Algeria 0.254

111 Syria 0.253


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Latin America average 0.411 vs. 0.494 (Belize and Haiti are out of the average calculation

because those were not included in the survey last year).


20 Chile 0.712

43 Peru 0.562

45 Panama 0.553

47 Mexico 0.535

49 Colombia 0.521

58 Uruguay 0.489

59 Costa Rica 0.478

69 Trinidad and Tobago 0.438

70 Brazil 0.436

72 El Salvador 0.426

77 Guatemala 0.41082 Jamaica 0.393

85 Paraguay 0.376

88 Honduras 0.372

89 Belize 0.367

91 Dominican Republic 0.357

95 Nicaragua 0.323

96 Argentina 0.323

103 Ecuador 0.275

106 Bolivia 0.271

108 Guyana 0.269121 Haiti 0.163

124 Venezuela 0.108

Sub-Saharan Africa average 0.285 vs. 0.379 last year.


32 Mauritius 0.622

48 South Africa 0.534

50 Botswana 0.520

66 Namibia 0.447

67 Rwanda 0.441

75 Ghana 0.419

80 Zambia 0.398

87 Kenya 0.372

93 Uganda 0.349


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97 Tanzania 0.303

98 Nigeria 0.292

101 Ethiopia 0.285

104 Malawi 0.273

107 Madagascar 0.271

112 Burkina Faso 0.247

113 Senegal 0.241

114 Mali 0.236

115 Cameroon 0.230

117 Benin 0.227

118 Mozambique 0.223

119 Lesotho 0.214

120 Cte d'Ivoire 0.197

122 Mauritania 0.139

123 Angola 0.120

125 Burundi 0.062126 Chad 0.047

127 Zimbabwe -

Index Information

Heritage Foundation: Index of Economic Freedomi

Per the Heritage Foundation, economic freedom is the fundamental right of every human to control his

or her own labor and property. In an economically free society, individuals are free to work, produce,

consume, and invest in any way they please, with that freedom both protected by the state and

unconstrained by the state. In economically free societies, governments allow labor, capital and goods

to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect

and maintain liberty itself.

The main components of economic freedom include:

Business Freedom Financial Freedom

Trade Freedom Property rights Fiscal Freedom Freedom from Corruption

Government Size Labor Freedom

Monetary Freedom Investment Freedom
http://www.heritage.org/Index/Ranking.aspxhttp://www.heritage.org/Index/Ranking.aspxhttp://www.heritage.org/Index/Ranking.aspx


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Fraser Institute: Economic Freedom of the Worldii

Per the Fraser institute, the index published in Economic Freedom of the World is designed to measure

the consistency of a nations institutions and policies with economic freedom. The key ingredients of

economic freedom are:

Personal choice Voluntary exchange coordinated by markets

Freedom to enter and compete in markets

Protection of persons and their property from aggression by others.

These four cornerstones underpin the design of the index. Put simply, institutions and policies are

consistent with economic freedom when they provide an infrastructure for voluntary exchange and

protect individuals and their property from aggressors. In order to achieve a high EFW rating, a country

must provide secure protection of privately owned property, even-handed enforcement of contracts,

and a stable monetary environment. It also must keep taxes low, refrain from creating barriers to both

domestic and international trade, and rely more fully on markets rather than the political process toallocate goods and resources.

World Economic Forum: Global Competitiveness Reportiii

The Global Competitiveness Reports competitiveness ranking is based on the Global Compet itiveness

Index, developed for the World Economic Forum based on 12 pillars of competitiveness, providing a

comprehensive picture of the competitiveness landscape in countries around the world at all stages of

development. The pillars include:

Institutions Labor Market efficiency

Infrastructure Financial Market Sophistication

Macroeconomic Stability Technological Readiness

Health and Primary Education Market Size

Higher Education and Training Business Sophistication

Goods Market Efficiency Innovation

World Bank: Doing Businessiv

A fundamental premise of Doing Business is that economic activity requires good rules. These include

rules that establish and clarify property rights and reduce the cost of resolving disputes, rules that

increase the predictability of economic interactions and rules that provide contractual partners withcore protections against abuse. The objective: regulations designed to be efficient in their

implementation, to be accessible to all who need to use them and to be simple in their implementation.

The list of measured activities which encompass the doing business survey include:

Starting a Business Paying Taxes

Dealing with Construction Permits Trading Across Borders
http://www.freetheworld.com/release.htmlhttp://www.freetheworld.com/release.htmlhttp://www.weforum.org/en/initiatives/gcp/Global%20Competitiveness%20Report/index.htmhttp://www.weforum.org/en/initiatives/gcp/Global%20Competitiveness%20Report/index.htmhttp://www.doingbusiness.org/rankingshttp://www.doingbusiness.org/rankingshttp://www.doingbusiness.org/rankingshttp://www.weforum.org/en/initiatives/gcp/Global%20Competitiveness%20Report/index.htmhttp://www.freetheworld.com/release.html


14/14


Registering Property Enforcing Contracts

Getting Credit Closing a Business

Protecting Investors

Euromoney Country Riskv

The Euromoney Country Risk grades the economies a bit different than the other assessment. Whereas

the other surveys try to gauge opportunity, Euromoney tries to assess risk. This is very important in

dealing with investment, particularly because a single devaluation can destroy returns. Political

uncertainty can destroy returns in spite of relative economic freedom.

Economic freedom does not preclude countries from bubbles and their subsequent crashes. The virtue

of economic freedom is seen in the recovery.

The following items makeup the Euromoney Country Risk Report:

Political Risk Debt Indicators Economic Performance Credit Rating

Structural Assessment Access to Bank Finance/Capital Markets

Download Indices Datavi

For media inquiries into the EconomyPolitics Index of Economic Efficiency, please contact

economipolitics [at] gmail [dot] com. Please feel free to use the full index, but must source back to

EconomyPolitics.

ihttp://www.heritage.org/Index/Ranking.aspx

iihttp://www.freetheworld.com/release.html

iiihttp://www.weforum.org/en/initiatives/gcp/Global%20Competitiveness%20Report/index.htm

ivhttp://www.doingbusiness.org/rankings

vhttp://www.euromoney.com/Article/2675660/Country-risk-Full-results.html

vi

https://docs.google.com/uc?id=0B0C4PemWytzfYzU5NjVkN2MtZTRjNC00YmJkLTg4MzItNTM0NGViMTYxYjAw&ex

port=download&hl=en
http://www.euromoney.com/Article/2675660/Country-risk-Full-results.htmlhttp://www.euromoney.com/Article/2675660/Country-risk-Full-results.htmlhttps://docs.google.com/uc?id=0B0C4PemWytzfYzU5NjVkN2MtZTRjNC00YmJkLTg4MzItNTM0NGViMTYxYjAw&export=download&hl=enhttps://docs.google.com/uc?id=0B0C4PemWytzfYzU5NjVkN2MtZTRjNC00YmJkLTg4MzItNTM0NGViMTYxYjAw&export=download&hl=enmailto:[email protected]:[email protected]:[email protected]://docs.google.com/uc?id=0B0C4PemWytzfYzU5NjVkN2MtZTRjNC00YmJkLTg4MzItNTM0NGViMTYxYjAw&export=download&hl=enhttp://www.euromoney.com/Article/2675660/Country-risk-Full-results.html

Documents

EconomyPolitics 3rd annual index of Economic Efficiency of the World