Economic freedom dropped around the world for the first time in decades as a result of the recession, according to a report released Monday by the Fraser Institute.
In its annual report on economic freedom, the free market think tank said Canada’s score dropped slightly from 8.0 to 7.95 – which was still enough to retain its seventh place ranking overall.
“Although Canada remains one of the world’s most economically free nations, our government’s response to the recession, which included additional borrowing and debt plus increased regulation, resulted in a slight drop in Canada's overall level of economic freedom,” said Fred McMahon, Fraser Institute’s vice-president of international policy research, in a release.
Economic freedom experienced its first global downturn in a quarter century, said the institute, with the average score falling to 6.67 in 2008 – the most recent year for which data is available – from 6.74 in 2007. Of the 123 countries with economic freedom rankings dating back to 1980, 88, or 71% saw their rankings decrease while only 35, or 28.5%, recorded an increase.
McMahon said that from 1980 to 2008, there was a gradual but steady upward movement in economic freedom worldwide.
“But, in response to the recession of 2008, many countries opted for perverse credit expansion and regulatory policies, damaging economic freedom and hindering future growth,” he said.
Hong Kong again leads the rankings of 141 nations and jurisdictions, followed by Singapore, New Zealand, Switzerland and Chile.
Zimbabwe maintains the lowest level of economic freedom among the 141 jurisdictions analyzed. Myanmar, Angola and Venezuela round out the bottom four nations.
McMahon also drew a negative connection between homicide rates and economic freedom in some countries.
The Fraser Institute uses five metrics when assessing economic freedom: size of government; legal structure and security of property rights; access to sound money; freedom to trade internationally; and regulation of credit, labour and business.