Economic Freedom Report 2008: Pakistan ranks 104 out of 141 countries

The 2008 edition of the Economic Freedom of the World report includes new research, examining the role of economic freedom in eliminating poverty with a particular focus on sub-Saharan Africa. Numerous studies have shown that countries with more economic freedom grow more rapidly and achieve higher per-capita income levels than those that are less free; therefore, it would seem that this growth should also help reduce poverty.


Economic Freedom Report 2008: Pakistan ranks 104 out of 141 countries

Judicial independence and integrity of legal system declines

Government spending and inflation increases

Rule of law and property rights weaker in Islamic nations

India inches up from 6.55 to 6.59; Hong Kong and Singapore rated best for economic freedom, Angola and Zimbabwe rank worst

Lahore September 25, 2008: The report ranks Hong Kong number one, followed by Singapore then New Zealand. Zimbabwe once again has the lowest level of economic freedom followed by Angola and Myanmar, according to the Economic Freedom of the World: 2008 Annual Report, released today by Pakistan’s first free market think tank, Alternate Solutions Institute.

“Weakness in the rule of law and property rights is particularly pronounced in sub-Saharan Africa, among Islamic nations, and for many nations that were part of the former Soviet bloc,” said James Gwartney, lead author of the report and professor of economics at Florida State University.

Pakistan ranked 104 out of 141 countries this year, after ranking 102 (out of 141 countries) in the last year’s report. In 2007 Report Pakistan scored 6.08 points out of 10; while this year its scored fell to 6.05. The areas that caused a decline in Pakistan’s overall performance are: size of government; legal structure and security of property rights; and, access to sound money. The areas in which Pakistan improved are: freedom to trade internationally; and, regulation of credit, labor, and business.

The annual peer-reviewed report uses 42 different measures to create an index ranking countries around the world based on policies that encourage economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to compete, and security of private property. The report is produced by Canada’s Fraser Institute in cooperation with independent institutes in 76 nations and territories including the Alternate Solutions Institute in Pakistan.

Research shows that individuals living in countries with high levels of economic freedom enjoy higher levels of prosperity, greater individual freedoms, and longer life spans. This year’s report also contains new research showing the impact of economic freedom on poverty reduction.

“Economic freedom is one of the key building blocks of the most prosperous nations around the world. Countries with high levels of economic freedom are those in which people enjoy high standards of living and personal freedoms. Countries at the bottom of the index face the opposite situation; their citizens are often mired in poverty, are governed by totalitarian regimes and have few if any, individual rights or freedoms,” said Alternate Solutions Institutes’ Executive Director, Dr. Khalil Ahmad.

The full report is available here.

Pakistan scores in key components of economic freedom (from 1 to 10 where a higher value indicates a higher level of economic freedom):

• Size of government: changed to 7.01 from 7.26 in
the last year’s report
• Legal structures and security of property rights:
changed to 4.31 from 4.35
• Access to sound money: changed to 6.45 from 6.50
• Freedom to trade internationally: changed to 5.91
from 5.78
• Regulation of credit, labour and business: changed
to 6.56 from 6.49

Economic Freedom and World Poverty

The 2008 edition of the Economic Freedom of the World report includes new research from Gwartney and Seth W. Norton, professor of business at Wheaton College, examining the role of economic freedom in eliminating poverty with a particular focus on sub-Saharan Africa. They point out that numerous studies have shown that countries with more economic freedom grow more rapidly and achieve higher per-capita income levels than those that are less free; therefore, it would seem that this growth should also help reduce poverty.

Gwartney and Norton note that since economic growth is the driving force underlying reductions in poverty, countries such as Chile, Peru, Thailand, Malaysia, South Korea, China, and India have seen their poverty rates decrease in recent decades because these countries have achieved rapid economic growth.

“If a country adopts reforms supportive of economic freedom, will the wellbeing of the poor improve? Theory indicates that the answer to this question is “yes,” but substantial reductions in poverty are likely to take some time,” Norton said.

“It will take time for the new policy direction to acquire credibility, investors and other decision-makers to respond to the more attractive environment, and the rate of growth to increase. As the higher level of economic freedom is sustained and the more rapid growth persists, poverty rates will fall, and they will fall by larger amounts with the passage of time.”

The authors 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

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.

To download the data sets, and previous Economic Freedom of the World reports, visit http://freetheworld.com

For more information, contact the Alternate Solutions Institute at
info@asinstitute.org

Property Rights Index 2008: Poor need property laws to create wealth

People in countries that protect their physical and intellectual property enjoy a GDP per capita up to nine times greater than those without legal protection, the 2008 edition of the International Property Rights Index (IPRI), reveals. Countries that protect property rights provide an essential foundation for peace, stability and prosperity, the Index shows: its calculations cover 115 countries, representing 96 per cent of the world’s GDP.


Pakistan lags behind 92 countries; ranked at 93 with weakest property rights

Far behind neighboring India’s position at 36

In IPR even Bangladesh is ahead of Pakistan

In Gender Equality, Pakistan is ranked at 86th out of 90 countries

People in countries that protect their physical and intellectual property enjoy a GDP per capita up to nine times greater than those without legal protection, the 2008 edition of the International Property Rights Index (IPRI), reveals. Countries that protect property rights provide an essential foundation for peace, stability and prosperity, the Index shows: its calculations cover 115 countries, representing 96 per cent of the world’s GDP. Alternate Solutions Institute, Lahore, and 40 organizations from six continents joined the Property Rights Alliance in Washington, DC and its Hernando de Soto Fellowship program to disseminate the report that is released today.

“Property is an extension of one’s self and life. Without its protection, we are just in a state of social and existential nothingness,” said Dr. Khalil Ahmad, Executive Director of the Institute. “What happened in the wake of Benazir Bhutto’s assassination, and how both public and private property was plundered is sufficient to prove the state’s criminal negligence in protecting its own property and the property of its citizens,” he added.

That is why for Pakistan not only protection of property rights but protection of property itself continues to be a great challenge. The 2008 IPRI Report shows that Pakistan lags behind 92 countries with weakest property rights and is ranked at 93rd position (score: 3.9 out of 10) along with Nepal and Ecuador. It is far behind India’s position at 36.

This year the top country is Finland with 8.6 score whereas the bottom country is Bangladesh with 2.9. It is important to note that Pakistan falls in the bottom quintile that includes countries like Bangladesh and Ethiopia. It is no better than its last year’s performance when it was ranked at 59th position out of 70 countries with a score of 3.3. As regards Intellectual Property Rights, Pakistan is ranked at 103rd with 2.8 score whereas Bangladesh fares better at 101st with 2.9. In Gender Equality regarding property rights, Pakistan is ranked at 86th out of 90 countries with a score of 2.4. In other components of the Index, Pakistan’s performance is as follows:

Legal and Political Environment: score 3.0; rank 106th; Last year’s score 1.9
Physical Property Rights: score 5.8; rank 56th; Last year’s score 5.1
Intellectual Property Rights: score 2.8; rank 103rd; Last year’s score 2.8
Gender Equality: score 2.4; rank: 86th out of 90 countries; Last year’s score 2.0 and rank 63rd out of 65 countries

Hernando De Soto, whose seminal work on property rights led to the conception of the IPRI, said this year’s results “provide further proof of the relationship between the robustness of a country’s property rights system and its economic development, revealing that much still needs to be done to extend property rights to more people, especially the poor.”

In order to incorporate and grasp the important aspects related to property rights protection, the 2008 IPRI focuses on three areas: Legal and Political Environment (LP), Physical Property Rights (PPR), and Intellectual Property Rights (IPR). The 115 countries represent 96% of world GDP: the study demonstrates that countries in the top quartile of the Index have an average GDP per capita more than nine times higher than those in the bottom quartile.

The International Property Rights Index provides the public, researchers and policymakers, from across the globe, with a tool for comparative analysis and research on global property rights. The Index seeks to assist underperforming countries to develop robust economies through an emphasis on sound property law.

Download the Report (PDF)

For more information, such as a country-by-country analysis, list of global partner organizations, visit www.InternationalPropertyRightsIndex.org

UN Climate Change Report Unfounded

Independent assessment of UN climate change report refutes alarmist claims made in official “Summary for Policymakers”


Alternate Solutions Institute: LAHORE, PAKISTAN — An independent review of the science of climate change contradicts in many respects the official Policymakers Summary released on Friday February 2, 2007 in Paris – calling into question the validity of the claims made by the UN.

The new report was produced for the renowned Fraser Institute, a member of the Civil Society Coalition on Climate Change. Written by a panel of 10 internationally-recognized experts, it is an assessment of a draft of the first section of the forthcoming report from the UN Intergovernmental Panel on Climate Change (IPCC).

“The debate around climate change has become highly politicized and alarmist. So we asked a team of highly qualified scientists to look at the IPCC report and produce a summary that they felt communicates the real state of knowledge. Our intent with this document is to allow people to see for themselves what is known and what remains highly uncertain within climate change science.” said Dr. Ross McKitrick, coordinator of the report.

This “Independent Summary for Policymakers” concludes:

On the basis of the most accurate measures available – weather satellites – there is little evidence of atmospheric warming since 1979 (when satellite records begin).

No compelling evidence that dangerous or unprecedented changes in the climate are underway.

No globally-consistent pattern in long-term precipitation trends, snow-covered area, or snow depth.

Current data suggest a global mean sea level rise of between two and three millimeters per year.

Observed climate change cannot be attributed to a specific cause, such as increased atmospheric greenhouse gas concentrations. Attribution studies relying on computer simulations do not take into account the uncertainty inherent in climate models, nor do they adequately account for many potentially important influences such as aerosols, solar activity, and land use changes.


Download the Fraser Institute Report (PDF)

Alternate Solutions Institute is a member institute of Civil Society Coalition on Climate Change.

Economic Freedom and Devopment – Applying the Lessons

When a citizen of South Asia looks eastward, to East and Southeast Asia, he will see the benefits of fast economic growth over the past half century. Many places, such as Singapore, Kuala Lumpur, Hong Kong, Taiwan and Shanghai, have followed Japan and left the third for the first world.

by Wolfgang Kasper

When a citizen of South Asia looks eastward, to East and Southeast Asia, he will see the benefits of fast economic growth over the past half century. Many places, such as Singapore, Kuala Lumpur, Hong Kong, Taiwan and Shanghai, have followed Japan and left the third for the first world. Trade, expert knowledge and investments flow freely to and from the affluent countries of America, Australia and Europe. Most people embrace the amenities and challenges of the modern age. Technical and organisational skills are being developed rapidly. There is an atmosphere of pragmatic cooperation and spirit of can-do optimism.

Read complete PDF of Economic Freedom and Devopment – Applying the Lessons

Property Rights Index 2007: Pakistan ranks at 59th position with weakest property rights

A new international index reveals how laws on physical and intellectual property stimulate growth while the weakest economies have the weakest laws. Today’s first annual International Property Rights Index (IPRI) measures seventy countries’ performance in the protection of land titles and copyrights, assets and patents showing the direct effect on economic well-being.


Lahore March 06, 2007: A new international index reveals how laws on physical and intellectual property stimulate growth while the weakest economies have the weakest laws. Today’s first annual International Property Rights Index (IPRI) measures seventy countries’ performance in the protection of land titles and copyrights, assets and patents showing the direct effect on economic well-being.

In the developing world these “essential legal mechanisms easily available to the elite entrepreneurs in their country and all business people in advanced nations” are what the poor need to “allow them to do business in markets outside the limited confines of family and acquaintances,” says world-leading economist Hernando de Soto in his introduction.

The 2007 IPRI analyses Legal and Political Environment (LP), Physical Property Rights (PPR), and Intellectual Property Rights (IPR) in 70 countries accounting for 95% of world GDP: the countries in the top quartile of the Index have an average GDP per capita more than seven times those in the bottom quartile. The final results show an 89 percent correlation between GDP per capita and the IPRI score for each country: the stronger the rights of ownership, the better off the people.

The report by Property Rights Alliance in Washington, DC and its Hernando de Soto Fellowship program is distributed by 38 organizations from six continents, including Alternate Solutions Institute Pakistan.

With regard to Pakistan, the protection of property rights continues to be a challenge. The IPR Index 2007 ranks Pakistan (along with Kenya, Guatemala and Ecuador) at 59th position out of 70 countries with a score of 3.3. The top country is Norway with a score of 8.3 out of 10, whereas the bottom country is Bangladesh with a score of 2.2. As to Gender Equality regarding the property rights, Pakistan has been assigned a score of 2.2 with ranking at 63. Here it is no better than Ethiopia and Kenya. In the area of Legal and Political Environment, Pakistan’s score is 1.9; in Physical Property Rights, it is 5.1; and, in Intellectual Property Rights, it is 2.8.

Secure property rights are the most effective incentive towards both domestic and foreign investment, and stimulate growth, says Dr. Khalil Ahmad of Alternate Solutions Institute.

The International Property Rights Index seeks to assist underperforming countries to develop robust economies through an emphasis on sound property law, creating social and economic stability and the freedom to trade in goods and ideas. The Index gives researchers, policymakers and the public around the globe a tool for comparative analysis and future research.

Download the Report (PDF)

For more information, such as a country-by-country analysis, list of global partner organizations, visit www.InternationalPropertyRightsIndex.org

The 2007 IPRI partner organizations include:

Alternate Solutions Institute (Pakistan)
Asociación de Consumidores Libres (Costa Rica)
Centre for Free Enterprise (Korea)
Centro de Investigaciones Económicas Nacionales (Guatemala)
CEPOS (Denmark)
Competere (Italy)
Circulo Liberal (Uruguay)
CIVITA (Norway)
ESEADE University (Argentina)
Eudoxa (Sweden)
European Center for Economic Growth (Belgium/Austria)
FREE (Poland)
Friedrich A. v. Hayek Institut (Austria)
Friedrich Naumann Foundation (East and Southeast Asia Regional Office)
Fundación Atlas 1853 (Argentina)
Fundación IDEA (Mexico)
Fundación Libertad (Panama)
Fundación Libertad y Democracia (Bolivia)
IMANI: The Centre for Humane Education (Ghana)
Initiative for Public Policy Analysis (Nigeria)
Instituto de Libre Empresa (Peru)
Instituto Ecuatoriano de Economía Política (Ecuador)
Instituto Liberdade (Brazil)
Instituto Libertad y Progreso (Colombia)
Instituto Para La Libertad y el Analisis de Politicas (Costa Rica)
Institut Constant de Rebecque (Switzerland)
Institute for Free Enterprise (Germany)
Institute for Public Affairs (Australia)
Inter Region Economic Network (Kenya)
International Policy Network (United Kingdom)
Jerusalem Institute for Market Studies (Israel)
Libertad y Desarrollo (Chile)
Liberty Institute (India)
Property Rights Alliance (United States)
RSE – Centre for Social and Economic Research (Iceland)
The Center for Institutional Analysis and Development (Romania)
The Free Market Foundation (South Africa)
The Lion Rock Institute (Hong Kong)

New Report: Global “Over-population” a Myth

On World Population Day, July 11th, the UNFPA will call for men to be more involved in family planning and women’s reproductive healthcare. Underlying this fine-sounding campaign is the UN Population Fund’s belief that we must stabilise and decrease world population in order to save the planet and promote economic growth.


On World Population Day, July 11th, the UNFPA will call for men to be more involved in family planning and women’s reproductive healthcare. Underlying this fine-sounding campaign is the UN Population Fund’s belief that we must stabilise and decrease world population in order to save the planet and promote economic growth.

On World Population Day, July 11th, the UNFPA will call for men to be more involved in family planning and women’s reproductive healthcare. Underlying this fine-sounding campaign is the UN Population Fund’s belief that we must stabilise and decrease world population in order to save the planet and promote economic growth.

But according to a new report title “Too Many People” by Professor Nicholas Eberstadt, an expert in population and demography, the UNFPA and other alarmists provide no credible evidence to justify this belief. The research paper has been released in Pakistan by the Alternate Solutions Institute, a partner organization of the Sustainable Development Network UK, publisher of the Eberstadt’s research report.

There is no causative link between population density and poverty – wealthy Monaco is forty times more densely populated than impoverished Bangladesh.

Nor is it true that the planet is struggling to feed and accommodate increasing numbers of people. Over the last century, global life expectancy has increased from 30 years to over 60 years; while maize, rice and wheat have become far more abundant and other natural resources have become more easily available.

Nevertheless, the UN and many other influential individuals and groups, and NGOs – such as in Pakistan – are calling for government-mandated population-planning schemes globally. But according to Eberstadt, such schemes historically have had almost zero effect on family sizes and fertility rates:

“Globally, there is no causative link between the availability of contraception and fertility levels – the rate of contraception use is virtually identical in Jordan and Japan, for instance, but Jordan’s fertility rate is more than three times higher.”

According to Eberstadt, the only thing that can affect fertility rates is parental choice – unless one opts for the Chinese approach of forced sterilisations and abortions.

“Whether they recognize it or not, advocates of anti-natal population programs must make a fateful choice. They must either opt for voluntarism, in which case their population targets will be meaningless. Or else they must opt for attempting to meet their population targets – in which case they must embrace coercive measures, like China’s one-child policy. There is no third way.”

Click here for full text of the report pdf

The 25 sponsoring organisations of “Too Many People?” by Professor Nicholas Eberstadt are as follows:

Ag Bio World Foundation, USA, www.agbioworld.org
Africa Fighting Malaria, South Africa, www.fightingmalaria.org
Alternate Solutions Institute, Pakistan, www.asinstitute.org
Asociación de Consumidores Libres, Costa Rica, www.consumidoreslibres.org
Association for Liberal Thinking, Turkey, www.liberal-dt.org.tr/
CEDICE, Venezuela, www.cedice.org
CEES, Guatemala, www.cees.org.gt/
CEPPRO, Paraguay, www.ceppro.org.py/
Circulo Liberal, Uruguay, www.circuloliberal.org
Centro de Innovación y Desarrollo Humano, Uruguay
ESEADE University, Argentina, www.esade.es/
Fundación Libertad, Panama, www.fundacionlibertad.org.pa
Free Market Foundation, South Africa, www.freemarketfoundation.com
FULIDE, Bolivia, www.fulide.org.bo/
Instituto Ecuatoriano de Economía Política, Ecuador, www.ieep.org.ec
International Policy Network, UK, www.policynetwork.net
Imani – the Centre for Humane Education, Ghana, www.imanighana.org
INLAP, Costa Rica, www.inlap.org
Instituto de Libre Empresa, Peru, www.ileperu.org
Instituto Liberdade, Brazil, www.il-rs.com.br
Institute for Public Policy Analysis, Nigeria, www.ippanigeria.org
Jerusalem Institute for Market Studies, Israel, www.jims-israel.org/
Liberty Institute, India, www.libertyindia.org
Lion Rock Institute, Hong Kong, www.lionrockinstitute.org
RSE – Centre for Social and Economic Research, Iceland, www.rse.is/

Research: Let the Poor Have Water, not Ideology

This year’s World Water Week will see activists gather in Stockholm to discuss ways of getting clean water to the 1 billion people around the world who are currently without it. The new research by Alex Nash argues that if water activists remain blinkered by ideology and continue to oppose private water provision, this goal will not be met.


This year’s World Water Week will see activists gather in Stockholm to discuss ways of getting clean water to the 1 billion people around the world who are currently without it. The new research by Alex Nash argues that if water activists remain blinkered by ideology and continue to oppose private water provision, this goal will not be met. This research paper has been released in Pakistan by the Alternate Solutions Institute, a partner organization of the Sustainable Development Network UK, publisher of the Nash’s research report.

Even though private water provision sees clean and safe water delivered to millions around the world, many politicians and NGOs remain irrationally opposed to the idea that profit should be made from “essential resources” like water. According to the paper’s author, Alex Nash, a water engineer with experience of public and private sector water projects in less-developed countries, this mindset is actively hindering universal access to water and with it the achievement of several Millennium Development Goals.

The truth is that many public utilities in less-developed countries suffer from endemic corruption and rarely deliver services equitably – even refusing to recognize and connect slum-dwellers: “The reality of many state run utilities is not pretty. Bribes, extortion, kickbacks, nepotism, patronage, shoddy technical standards; it’s all in a day’s work.”

Meanwhile, it is the private sector – from individual water porters to larger companies – that fill in the gaps left by dysfunctional state utilities.

The World Bank estimates that in most cities in less developed countries, more than half the population get their water from suppliers other than the public utility. But political opposition to private water could spell the end of such vital services. “The net result of these ideologues’ well-meaning efforts is a staunch defense of the corrupt, lazy or incompetent utility managers and mayors. It is a defense of the comfortable middle classes in developing countries who have cheap water while their poorer compatriots queue and walk all day.”

“Water Provision for the Poor- How ideology muddies the debate”
by Alex Nash

Download the paper (PDF)

The 26 sponsoring organizations of “Water Provision for the Poor- How ideology muddies the debate” by Alex Nash are as follows:

Ag Bio World Foundation, USA
Africa Fighting Malaria, South Africa
Alternate Solutions Institute, Pakistan
Asociación de Consumidores Libres, Costa Rica
Association for Liberal Thinking
CEDICE, Venezuela
CEPPRO, Paraguay
Centro de Innovación y Desarrollo Humano, Uruguay
ESEADE University, Argentina
Fundación Atlas 1853, Argentina
Fundación Libertad, Panamá
Free Market Foundation, South Africa
Forum on China’s Economic Growth and Business Cycle, China
Instituto Ecuatoriano de Economía Política, Ecuador
International Policy Network, UK
IMANI Center for Policy and Education, Ghana
INLAP, Costa Rica
Instituto de Libre Empresa, Peru
Instituto Liberdade, Brazil
Instituto Libertad y Progreso
Institute of Public Affairs, Australia
Jerusalem Institute for Market Studies, Israel
Liberty Institute, India
Lion Rock Institute, Hong Kong
RSE – Centre for Social and Economic Research, Iceland
Zambia Institute for Public Policy Analysis, Zambia

Economic Freedom of the World 2004 Annual Report: Special Pakistan Edition

Economic Freedom of the World is the most comprehensive index of economic freedom in the world and the only that uses reproducible measures for peer-reviewed research. The 2004 Annual Report explores the evolution of economic freedom over the last quarter century and the impact of economic freedom on people’s lives.


As it is, to be successful or profitable, a business venture needs certain freedoms out of which economic freedom is the most crucial. In simple words, economic freedom means, on the one hand, freedom to engage in any economic activity; and on the other, freedom from any external control, be it government or any such authority, which it exerts by regulating and taxing the businesses. Excessive government control results in less and less economic freedom and an unpleasant environment for the growth of overall economy and individual prosperity as well.

The state of economic freedom in Pakistan is not encouraging. Too much regulation and too much taxation and their red-taped implementation are sitting at the entry point of any business activity and hinder their growth. Not only does it interfere with the personal choice of the people; intervenes in the voluntary exchange; and thus restricts the freedom to compete on the part of producers and traders; it increases the cost of starting a business also, and thus creates such an environment that is not conducive to the development of private economic activity in Pakistan catering freely to the needs of people.

Economic Freedom of the World is the most comprehensive index of economic freedom in the world and the only that uses reproducible measures for peer-reviewed research. The 2004 Annual Report explores the evolution of economic freedom over the last quarter century and the impact of economic freedom on people’s lives.

It answers many important questions, including:

• Has economic freedom been increasing or decreasing?

• Do poor people benefit when countries become economically free?

• What countries have made big gains in economic freedom in recent years?

• What effect does economic freedom have on prosperity?

• How does economic freedom influence investment?

• How does economic freedom influence productivity?

• What impact does economic freedom have on income inequality?

Download the Economic Freedom of the World 2004 Annual Report (PDF)

Economic Freedom of the World 2005 Annual Report: Special Pakistan Edition

Economic Freedom of the World is the most comprehensive index of economic freedom in the world and the only that uses reproducible measures for peer-reviewed research. The 2005 Annual Report explores the evolution of economic freedom over the last quarter century and the impact of economic freedom on people’s lives.


As it is, to be successful or profitable, a business venture needs certain freedoms out of which economic freedom is the most crucial. In simple words, economic freedom means, on the one hand, freedom to engage in any economic activity; and on the other, freedom from any external control, be it government or any such authority, which it exerts by regulating and taxing the businesses. Excessive government control results in less and less economic freedom and an unpleasant environment for the growth of overall economy and individual prosperity as well.

The state of economic freedom in Pakistan is not encouraging. Too much regulation and too much taxation and their red-taped implementation are sitting at the entry point of any business activity and hinder their growth. Not only does it interfere with the personal choice of the people; intervenes in the voluntary exchange; and thus restricts the freedom to compete on the part of producers and traders; it increases the cost of starting a business also, and thus creates such an environment that is not conducive to the development of private economic activity in Pakistan catering freely to the needs of people.

Economic Freedom of the World is the most comprehensive index of economic freedom in the world and the only that uses reproducible measures for peer-reviewed research. The 2005 Annual Report explores the evolution of economic freedom over the last quarter century and the impact of economic freedom on people’s lives.

It answers many important questions, including:

• Has economic freedom been increasing or decreasing?

• Do poor people benefit when countries become economically free?

• What countries have made big gains in economic freedom in recent years?

• What effect does economic freedom have on prosperity?

• How does economic freedom influence investment?

• How does economic freedom influence productivity?

• What impact does economic freedom have on income inequality?

• How does economic freedom reduce violent conflict and promote peace?

Download the Economic Freedom of the World 2005 Annual Report (PDF)

Economic Freedom Report 2007: Pakistan Climbs the Ladder of Economic Freedom

Pakistan climbs the ladder of Economic Freedom scoring 6 points ranking 101 out of 141 countries; leaps big in Legal Structure and Security of Property Rights area by improving from 2.5 to 4.4; loses big in Access in Sound Money by sliding down from 6.4 to 6.0.


Pakistan climbs the ladder of Economic Freedom scoring 6 points ranking 101 out of 141 countries; leaps big in Legal Structure and Security of Property Rights area by improving from 2.5 to 4.4; loses big in Access in Sound Money by sliding down from 6.4 to 6.0.

Pakistan climbs the ladder of Economic Freedom scoring 6 points ranking 101 out of 141 countries; leaps big in Legal Structure and Security of Property Rights area by improving from 2.5 to 4.4; loses big in Access in Sound Money by sliding down from 6.4 to 6.0.

India inches up from 6.5 to 6.6; Hong Kong and Singapore rated best for economic freedom, Zimbabwe and Myanmar rank worst.

Lahore September 07, 2007: Hong Kong once again tops international rankings for economic freedom, with Singapore a close second and New Zealand in third spot, according to the Economic Freedom of the World: 2007 Annual Report, released today by Pakistan’s first free market think tank, Alternate Solutions Institute.

Pakistan ranked 101 out of 141 countries this year, after ranking 91 (out of 130 countries) in the last year’s report. In 2006 Report Pakistan scored 5.7 points out of 10; while this year its scored leapt to 6.0. The areas that improved Pakistan’s overall performance are: size of government; legal structure and security of property rights; and, freedom to trade internationally. The areas in which Pakistan lost a lot are: access to sound money; and, regulation of credit, labor, and business.

The annual peer-reviewed report uses 42 different measures to create an index ranking countries around the world based on policies that encourage economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to compete, and security of private property.

Research shows that individuals living in countries with high levels of economic freedom enjoy higher levels of prosperity, greater individual freedoms, and longer life spans. These measures are part of a fundamental base needed to build a free and prosperous nation. A quick glance at the names of countries scoring lowest on the index quickly shows that without protection of property rights and judicial independence, there is little individual freedom and little in the way of prosperity.

Pakistan scores in key components of economic freedom (from 1 to 10 where a higher value indicates a higher level of economic freedom):

• Size of government: changed to 7.3 from 7.2 in the last year’s report

• Legal structures and security of property rights: changed to 4.4 from 2.5

• Access to sound money: changed to 6.0 from 6.4

• Freedom to trade internationally: changed to 5.8 from 5.7

• Regulation of credit, labour and business: changed to 6.3 from 6.5

International Rankings

In this year’s main index, Hong Kong retains the highest rating for economic freedom, 8.9 out of 10. The other top scorers are: Singapore (8.8), New Zealand (8.5), Switzerland (8.3), Canada (8.1), United Kingdom (8.1), United States (8.1), Estonia (8.0), Australia (7.9), and Ireland (7.9).

The rankings and scores of other large economies are Germany, 18 (7.6); Japan, 22 (7.5); Mexico, 44 (7.1); France, 52 (7.0); Italy, 52 (7.0); India, 69 (6.6); China, 86 (6.3); Brazil, 101 (6.0); and Russia, 112 (5.8).

The majority of nations ranked near the bottom are African and all the nations in the bottom 10 are African, with the exceptions of Venezuela and Myanmar. They are: Zimbabwe (2.9), Myanmar (3.8), the Democratic Republic of the Congo, (4.0), Angola (4.2), the Republic of the Congo, (4.3), Central Africa Republic, (4.6), Venezuela (4.9), Burundi (5.0), Chad (5.1), Togo (5.1) and Niger (5.1). Botswana’s ranking, tied for 38th with a score of 7.2, is the best among sub-Saharan African nations.

Five nations increased their score by more than three points since 1980: Hungary (3.0), Peru (3.0), Uganda (3.2), Ghana (3.6), and Israel (3.7). Only three nations decreased their score by more than one point: Zimbabwe (−1.7), Venezuela (−1.7) and Myanmar (−1.3). Other nations that saw reductions are: Nepal (−0.7), Bahrain (−0.3), Hong Kong (−0.2), Malaysia (−0.2), the Republic of Congo (−0.2), and Haiti (−0.1).

“Weakness in the rule of law and property rights is particularly pronounced in sub-Saharan Africa, in many parts of the Middle East, and for several nations that were part of the former Soviet bloc although some of these nations have shown improvement,” said James Gwartney, lead author of the report and a Professor of Economics at Florida State University. “Many Latin American and Southeast Asian nations also score poorly for rule of law and property rights. The nations that rank poorly in this category also tend to score poorly in the trade and regulation categories, even though several have reasonably sized governments and sound money.”

This year 11 additional countries have been added to the index. These countries are Angola (4.2, 138th), Bosnia and Herzegovina (6.1, 97th), Burkina Faso (5.5, 122nd), Ethiopia (6.0, 101st), Kazakhstan (7.3, 32nd), Kyrgyz Republic (6.8, 60th), Lesotho (6.8, 60th), Mauritania (6.5, 76th), Moldova (6.5, 76th), Montenegro (6.8, 60th), and Serbia (5.6, 119th).

Global Spread of Economic Freedom

The 2007 edition of the Economic Freedom of the World report also includes new research from Russell Sobel, economics professor at West Virginia University, and Peter Leeson, professor in the study of capitalism at George Mason University, showing how economic freedom spreads between countries. Sobel and Leeson note that historically, many foreign policy decisions have been based on the notion that economic reforms in a few key nations would substantially improve the economies of other countries throughout the region – the so-called “domino effect.”

The authors conclude that while economic freedom changes in one country have only a modest impact on neighbouring countries, when multiple neighbours experience simultaneous changes in economic freedom, the impact is much greater. Broad regional changes in freedom can and do have significant impacts on surrounding countries. By liberalizing trade with foreign nations, economically free countries can exert a positive, if modest, impact on economic freedom in less free nations.

This research indicates that free-trade agreements allowing a number of nations to simultaneously coordinate trade liberalization could have a sizeable influence on spreading economic freedom to economically repressed regions of the world, Sobel and Leeson said.

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 for 2005, the most recent year for which data are available. The annual report is published in conjunction with the Economic Freedom Network, a group of independent research and educational institutes in over 70 nations.

For downloading the Report, data sets, and previous Economic Freedom of the World reports, visit www.freetheworld.com

For more information, please visit http://asinstitute.org or contact at info@asinstitute.org