Free market supporters say economic freedom is necessary for economic prosperity. But until recently no one had tried to define or measure it.
Now two reports are attempting just that: The 1996 Index of Economic Freedom, published by the Heritage Foundation–which first published the economic index in 1995–and newcomer Economic Freedom of the World: 1975-1995, co-published by the Vancouver-based Fraser Institute and 10 other institutes worldwide.
The Heritage index uses 10 unweighted factors to measure 142 countries. Fraser's employs 17 weighted factors to rank 102 countries. Hong Kong and Singapore finish numbers 1 and 2 and the United States makes the top 10 in both.
The respective authors are quick to criticize the other index's data and methodology. But the indexes were created for different audiences. The Heritage index is deliberately user-friendly, intended for the politicians and reporters who shape public policy. Fraser's is designed more for academics interested in calculating the relationship between economic freedom and affluence.