Archives for April 13th, 2004

The 2004 Index of Economic Freedom measures a country’s economic freedom based on things like trade and monetary policy, government intervention in the economy, and property rights. It’s published by The Wall Street Journal and the conservative think tank The Heritage Foundation, so the emphasis is on free enterprise and limited government.

Looking through the results, a few things caught my attention. The first is that Slovenia did poorly. Among incoming EU members, only Poland fared worse. Estonia, by comparison, is ranked sixth in the world — ahead of countries like the United Kingdom and the United States. Although Slovenia leads Eastern Europe in GDP per capita, its economic freedom ranking is below countries like Armenia and Botswana.

The second thing I noticed is that although Slovenia is considered “mostly free” — with a score of 2.63 out of 5 — it is closer to “mostly unfree” than “free.”

Take a look at this table. I’ve included the highest ranked (Hong Kong) and the lowest ranked (North Korea), but otherwise concentrated on Eastern European countries. Clicking on a country name will take you to its detailed report.

There are a few reasons for Slovenia’s poor showing (lousy foreign direct investment (FDI) policy, high inflation, hostility to foreign ownership) but its absolute lowest score (5 out of 5) is for, of course, its income tax.

You can see the 2004 Index of Economic Freedom here.

(Indirect thanks to Dragos!)