Economic Freedom of the World, 1997

Xavier de Vanssay is an associate professor of economics at Glendon
College, York University.

This follow-up to Economic Freedom of the World: 1975–1995, rates
economic freedom in, and assesses the overall macroeconomic performance
of, 115 countries (for the first time including China, Ukraine, and
Russia) over the period 1975 to 1996. Unlike political or civil
freedoms—which measure, respectively, the degree of participation in
the political process and such rights as freedom of the press—economic
freedom deals with such issues as personal choice, protection of private
property, and freedom of exchange.

The authors rank countries according to a carefully constructed index
of economic freedom composed of 17 factors, including money and
inflation, takings (taxation and conscription), government operations,
and international trade. These factors are measured over a period of 20
years for each country. We learn that Hong Kong was the world’s
highest rated economy (that is, the freest) from 1975 until 1995; at the
other extreme, Algeria ranked the lowest in 1995.

Despite occasional outbreaks of sanctimoniousness (“If [Bangladesh]
is going to do better in the future, movement toward greater economic
freedom is essential”), this is a useful and well-researched
book—one that reflects the healthy trend among economists to
acknowledge that ec-onomic forces are not entirely autonomous from
social and political forces.