Showing papers by "Joshua C. Hall published in 2011"
Book•
20 Sep 2011TL;DR: The index published in Economic Freedom of the World as mentioned in this paper measures the degree to which the policies and institutions of countries are supportive of economic freedom, including personal choice, voluntary exchange, freedom to compete, and security of privately owned property.
Abstract: The latest edition of this annual report, published in association with the Institute of Economic Affairs
Executive Summary: The index published in Economic Freedom of the World measures the degree to which the policies and institutions of countries are supportive of economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to compete, and security of privately owned property. Forty-two data points are used to construct a summary index and to measure the degree of economic freedom in five broad areas:
Size of Government: Expenditures, Taxes, and Enterprises;
Legal Structure and Security of Property Rights;
Access to Sound Money;
Freedom to Trade Internationally;
Regulation of Credit, Labor, and Business.
Economic freedom has suffered another setback
The chain-linked summary index (exhibit 1.4) permits comparisons over time. The average economic freedom score rose from 5.53 (out of 10) in 1980 to 6.74 in 2007, but fell back to 6.67 in 2008, and to 6.64 in 2009, the most recent year for which data are available. (See chapter 1 for a discussion.)
In this year’s index, Hong Kong retains the highest rating for economic freedom, 9.01 out of 10. The other na- tions among the top 10 are: Singapore (8.68); New Zealand (8.20); Switzerland (8.03); Australia (7.98); Canada (7.81); Chile (7.77); United Kingdom (7.71); Mauritius (7.67); and the United States (7.60).
The rankings (and scores) of other large economies are Germany, 21 (7.45); Japan, 22 (7.44); France, 42 (7.16); Italy, 70 (6.81); Mexico, 75 (6.74); Russia, 81 (6.55); China, 92 (6.43); India, 94 (6.40); and Brazil, 102 (6.19).
The bottom 10 nations are: Zimbabwe (4.08); Myanmar (4.16); Venezuela (4.28); Angola (4.76); Democratic Republic of Congo (4.84); Central African Republic (4.88); Guinea-Bissau (5.03); Republic of Congo (5.04); Burundi (5.12); and Chad (5.32).
The world’s largest economy, the United States, has suffered one of the largest declines in economic freedom over the last 10 years, pushing it into tenth place. Much of this decline is a result of higher government spending and borrowing and lower scores for the legal structure and property rights components. Over the longer term, the summary chain- linked ratings of Venezuela, Zimbabwe, United States, and Malaysia fell by eight-tenths of a point or more between 1990 and 2009, causing their rankings to slip.
The chain-linked summary ratings of Uganda, Zambia, Nicaragua, Albania, and Peru have increased by three or more points since 1990. The summary ratings of eight other countries—Bulgaria, Poland, El Salvador, Romania, Ghana, Nigeria, Hungary, and Guinea-Bissau—increased by between two and three points during this same period.
Nations that are economically free out-perform non-free nations in indicators of well-being
Nations in the top quartile of economic freedom had an average per-capita GDP of $31,501 in 2009, compared to $4,545 for those nations in the bottom quartile, in constant 2005 international dollars.
Nations in the top quartile of economic freedom had an average growth in per-capita GDP between 1990 and 2009 of 3.07%, compared to 1.18% for those nations in the bottom quartile, in constant 2005 international dollars (exhibit 1.10).
In the top quartile, the average income of the poorest 10% of the population was $8,735, compared to $1,061 for those in the bottom quartile, in constant 2005 international dollars (exhibit 1.12). Interestingly, the aver- age income of the poorest 10% in the top quartile is almost double the overall income per capita in the bot- tom quartile ($4,545, exhibit 1.9): the poorest people in the most economically free countries are nearly twice as rich as the average people in the least free countries.
Life expectancy is 79.4 years in the top quartile compared to 60.7 years in the bottom quartile (exhibit 1.13).
The $1.25-per-day poverty rate is 2.7% in the top quartile compared to 41.5% in the bottom quartile (exhibit 1.17).
197 citations
TL;DR: The authors integrated two growing strains of literature: economic and political unions on outcomes such as bond ratings and economic convergence, and found that the effect of political unions and economic and economic unions on the outcomes of economic convergence and bond ratings.
Abstract: This paper integrates two growing strains of literature. The first strain looks at the effect of economic and political unions on outcomes such as bond ratings and economic convergence. The second ...
14 citations
13 citations
TL;DR: This article investigated the political economy of military base closure in the United States and found no evidence of political influence on base closings and concluded that the current process insulates base closure and realignment from traditional political influences.
Abstract: This paper investigates the political economy of military base closure in the United States. The Base Realignment and Closure (BRAC) Act was passed in 1988 in an attempt to insulate base closure and realignment from politic influence. The political pressure to influence the process remains strong, however, given the negative effects base closures can often have on a local economy. Using data from the 2005 BRAC round, we examine whether the current process insulates base closure and realignment from traditional political influences. We find no evidence of political influence on base closings.
11 citations
TL;DR: In this paper, the authors examine six national indices that are often used as indicators of how business friendly a state is relative to its neighbors and find that many of these indices are not useful in explaining the variation of entrepreneurial activity among the 50 US states.
Abstract: Entrepreneurial activity is a fundamental component of economic growth and development in the United States. States that experience increased entrepreneurial activity also see higher levels of overall economic growth. From a policy perspective, it is necessary to understand what is at the root of entrepreneurship. In this paper we closely examine six national indices that are often used as indicators of how “business friendly” a state is relative to its neighbors. We find that many of these indices are not useful in explaining the variation of entrepreneurial activity among the 50 US states.
10 citations
Posted Content•
TL;DR: The EFW index measures the extent to which nations allow their citizens economic freedom as discussed by the authors, and one component of this area is the size of the trade sector, or rather the deviation of a country's trade sector from its expected size.
Abstract: The Economic Freedom of the World (EFW) index measures the extent to which nations allow their citizens economic freedom. The freedom of people to trade internationally is a featured area within the index. One component of this area is the size of the trade sector, or rather the deviation of a country's trade sector from its expected size. This note explains the basic methodology used to estimate the model and create the ratings for the deviation of a country's trade sector from its expected size component of the EFW index.
7 citations
Journal Article•
TL;DR: This article argued that the so-called "Washington Consensus" failed not because of intentions or intelligence, but because most economists have failed to appreciate that property rights are emergent institutions.
Abstract: While property rights are important to the market order, the transformation of common pool resources into private property through privatization has achieved mixed results. We argue that the so-called “Washington Consensus” failed not because of intentions or intelligence, but because most economists have failed to appreciate that property rights are emergent institutions. Instead, much of the work in development treats property rights like an exportable good. In this paper, we use evidence from the postcommunist transition to provide preliminary evidence that countries that used direct auctioning to allocate property rights following transition outperformed other methods of privatization.
Posted Content•
TL;DR: VanMetre and Hall as discussed by the authors empirically test the relationship between property rights and economic prosperity and conclude that secure property rights enhance the return on human and physical capital, which in turn leads to improved economic performance.
Abstract: In this essay, VanMetre and Hall draw upon the Austrian and new institutional schools of economics and deploy the Economic Freedom of the World Index to empirically test the relationship between property rights and economic prosperity. Their analysis confirms De Soto’s thesis that secure property rights enhance the return on human and physical capital, which in turn leads to improved economic performance.