By David Roberts

 

There were two research reports on "economic freedom" published in the last few weeks, one by the Heritage Foundation and one by the Fraser Institute, and with some rather different - but some very similar - conclusions.

The Washington, DC-based Heritage Foundation, in its 2011 Index of Economic Freedom, once again (for the 17th year in a row, despite or because of the handover to the People's Republic of China), put Hong Kong at the top of the ranking. According to the think tank, "Economic freedom advanced this year, regaining much of the momentum lost during the fiscal crisis and global reces­sion. Many governments around the world have rededicated themselves to fiscal soundness, openness and reform, and the majority of countries are once again on a positive path to greater freedom."

Heritage's global average economic freedom index for 2011, based on 10 measures that "evaluate openness, the rule of law, and competitiveness," rose 0.3 points to 59.7 from last year. Not bad, maybe.

The Vancouver-based Fraser Institute's Economic Freedom of the World 2011 report (based on size of government: expenditures, taxes, and enterprises; legal structure and security of property rights; access to "sound" money; freedom to trade internationally; and regulation of credit, labor and business), however, paints a rather gloomier picture. Under the subheading "Economic freedom has suffered another setback" the report says the average economic freedom score rose consistently from 1980 to 2007 but slipped in the following two years. Both studies take figures from 2009, supposedly the latest year with available data.

It may be easy to dismiss these reports as out of date, produced by notoriously conservative research institutes with their own agenda, and so on. But it would be a mistake to ignore them. They are based on serious research. If we turn to the rankings themselves, and focus on Latin America, there are some disturbing, and encouraging signs in both. And perhaps a few surprises.

In the Fraser Institute's latest study, Chile beats the likes of the UK, the US, Japan, France (not so surprising) and some Scandinavian countries, coming seventh overall, out of 141 in all. Panama is ranked 23rd, and Peru also fares well, in the 33rd spot.

At the other end of the scale, and equally if not more predictably, Venezuela languishes in 139th place, just managing to prevail over Myanmar (or Burma) and Zimbabwe. Argentina (119th) and Ecuador (112th) also score poorly, and Bolivia is in the 99th spot. No surprise there.

Perhaps the most shocking of all, however, and in both studies, is the pitiful performance of Brazil, Latin America's new darling on the block, often touted as an emerging market superpower that should represent the region on the international forum. In the 2011 Fraser study, Brazil comes in at 102, below most countries of the region, and in the Heritage ranking 113th, out of 179 nations in all (in both studies some countries are not classified, presumably because of a lack of information, such as Cuba).

Even so, clearly much needs to be done for Brazil to lay claim to be Latin America's leader.

bnamericas

Caribbean Blog International

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