The Wall Street Journal-20080123-Freedom- Transparency and Economic Prosperity Go Hand in Hand
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Freedom, Transparency and Economic Prosperity Go Hand in Hand
What is striking about the 2008 Index of Economic Freedom ("The Real Key to Development," by Mary Anastasia O'Grady, op-ed Jan. 15) is the stark division among European countries. Whereas Ireland, Switzerland, U.K., Denmark, the Netherlands, Luxembourg, Finland, Belgium, Germany and Spain all fall in the first quintile, two major nations do not: France and Italy. Policymakers and U.S. officials should bear that in mind when dealing with a supposed unified EU. The Index makes it crystal clear that the French and Italians play by different economic rules that could use substantial loosening.
Frank D. Tinari, Ph.D.
Livingston, N.J.
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French President Nicholas Sarkozy's desire to find a "more touchy- feely index" to determine whether France is becoming more civilized led me to a simple solution, one that already exists: The President should start tracking France's performance in the Index of Economic Freedom published annually by the Journal and the Heritage Foundation. Therein lies an existing and reliable mechanism for assessing the overall capacity of a nation to cultivate an economically free climate conducive to individual prosperity (which one might conclude is a prerequisite for a civilized, culturally sophisticated society).
The Index of Economic Freedom is an amalgam of key economic elements or factors. Taken together, these elements can indicate the extent to which a nation's economy is free and capable of providing such tangible benefits for its citizens as higher per capita GDP. In the case of France, for example, fiscal freedom, freedom from government, and investment freedom are weak. Government spending and tax rates are exceptionally high to support an extensive welfare state. Foreign investment is hurt by the intrusive regulatory system. Excessive labor protections have generated widespread youth unemployment and underemployment. It can be argued that these factors account for some of the concerns that Mr. Sarkozy has about the soul of his nation.
Years of experience with the Index have shown that countries that actively promote economic freedom enhance the ability of their citizens to live better lives. Therefore, I would argue that in France, which was found to be only 66% economically free with a rank of 45 out of 157 countries in the 2007 Index of Economic Freedom, the president, policy makers and regulators have a ready-made report card and prescription for measuring and improving the lot of those in their country who feel "...the increasing stress of trying to succeed in globally competitive markets." By the way, as noted in your Jan. 15 article on the 2008 Index, France has now slipped to number 48.
John B. Sieg
Birmingham, Mich.
Mr. Sieg served as a marketing consultant to the Heritage Foundation.
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It is worth noting that economic freedom is also a significant factor that affects the level of corruption in a country. Countries that rank high on the Index of Economic Freedom are also less likely to be corrupt. Most countries that rank low on the Economic Freedom Index are heavily corrupt, as measured by the Corruption Perception Index produced annually by Transparency International. This relationship is not surprising -- corruption, often in the form of bribe taking, breeds well in a system of oppressive regulations, bureaucratic red tape, opaque decision-making processes, barriers to individual initiatives, and restricted availability of information. "Unfree" economies are both poor and corrupt. Increasing economic freedom in a country will spur economic growth, raise incomes, and also reduce corrupt practices.
Rajib Sanyal
Marquette, Mich.
