Global economic freedom up slightly—The Bahamas ranks 39 among 162 jurisdictions

First Published: 2020-09-12

Nassau, Bahamas—The Bahamas ranks 39 out of 162 countries and territories included in the Economic Freedom of the World: 2020 Annual Report, released today by The Nasssau Institute in conjunction with Canada’s Fraser Institute.

Last year, The Bahamas ranked 58.

The bahamas overall score improved from 7.25 out of 10 to 7.62.

Hong Kong and Singapore again top the index, continuing their streak as 1st and 2nd respectively. New Zealand, Switzerland, the United States, Australia, Mauritius, Georgia, Canada and Ireland round out the top 10.

The report, based on 2018 data (the most recent comparable data), warns that recent events in Hong Kong will likely cause its score to fall as data become available for 2019 and 2020.

“Intrusion on the rule of law, the foundation of economic freedom, by the Chinese Communist Party is negatively affecting economic freedom in Hong Kong,” said Fred McMahon, Dr. Michael A. Walker Research Chair in Economic Freedom with the Fraser Institute.

The report was prepared by James Gwartney, Florida State University; Robert Lawson and Ryan Murphy of Southern Methodist University; and Joshua Hall, West Virginia University. It measures the economic freedom (levels of personal choice, ability to enter markets, security of privately owned property, rule of law, etc.) by analysing the policies and institutions of 162 countries and territories.

The 10 lowest-rated countries are African Republic, Democratic Republic of Congo, Zimbabwe, Republic of Congo, Algeria, Iran, Angola, Libya, Sudan and Venezuela. Despotic countries such as North Korea and Cuba can’t be ranked due to lack of data.

Other notable rankings include Japan (20th), Germany (21st), Italy (51st), France (58th), Mexico (68th), Russia (89th), India (105th), Brazil (105th) and China (124th).

According to research in top peer-reviewed academic journals, people living in countries with high levels of economic freedom enjoy greater prosperity, more political and civil liberties, and longer lives.

For example, countries in the top quartile of economic freedom had an average per-capita GDP of $44,198 in 2018 compared to $5,754 for countries in the bottom quartile.

Moreover, in the top quartile, the average income of the poorest 10 per cent was $12,293 compared to $1,558 in the bottom quartile. Interestingly, the average income of the poorest 10 per cent in the most economically free countries is more than twice the average per-capita income in the least free countries.

“Where people are free to pursue their own opportunities and make their own choices, they lead more prosperous, happier and healthier lives,” McMahon said.

The Fraser Institute produces the annual Economic Freedom of the World report in cooperation with the Economic Freedom Network, a group of independent research and educational institutes in nearly 100 countries and territories. It’s the world’s premier measurement of economic freedom, measuring and ranking countries in five areas—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.

See the full report at www.fraserinstitute.org/economic-freedom.

The Bahamas 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 9.1 from 8.1 in the last year’s report
  • Legal system and property rights: changed to 6.17 from 6.52
  • Access to sound money: changed to 8.11 from 6.88
  • Freedom to trade internationally: changed to 6.25 from 6.54
  • Regulation of credit, labour and business: changed to 8.46 from 8.22

The Bahamas has made progress over 2017’s data and we hope this trend continues.

Here’s how The Bahamas compares to regional competitors Jamaica and Barbados.

https://www.fraserinstitute.org/economic-freedom/dataset?geozone=world&min-year=2&max-year=0&page=dataset&filter=1&countries=BHS,BRB,JAM&year=2018

About the Economic Freedom Index

Economic Freedom of the World measures how policies and institutions of countries support economic freedom. This year’s publication ranks 162 countries and territories. The report also updates data in earlier reports where data has been revised.

For more information on the Economic Freedom Network, datasets and previous Economic Freedom of the World reports, visit www.fraserinstitute.org. And you can “Like” the Economic Freedom Network on Facebook at www.facebook.com/EconomicFreedomNetwork.

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CONTACTS:

Rick Lowe (242) 302-0140

For more information on the Economic Freedom Network, datasets, and previous Economic Freedom of the World reports, go to www.fraserinstitute.org/economic-freedom. 

Founded in 1995 The Nassau Institute is a research institute – a think tank- that promotes capitalism and free markets. Our mission is to formulate and promote public policies for The Bahamas based on the principles of limited government, individual freedom, and the rule of law. www.nassauinstitute.org

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