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Observers agree that economic liberty is important for economic growth, personal well-being, and even human flourishing. At AEI on Friday, the authors of several economic freedom indexes discussed why measuring that freedom is important, and how their organizations attempt to do so.
As Fred McMahon of the Fraser Institute noted during his presentation, economic freedom is important to growth and development because "without economic freedom, you can only get ahead by hurting others; with economic freedom, you get ahead by working with others." He further explained that economic liberty has been shown to influence per capita income, education, longevity, and environmental sustainability.
While all of the panelists agreed on the significance of economic liberty, their indexes measure it in different ways. The World Bank's Doing Business measure takes into account not only how easy it is to start a business, but also how easy it is to maintain or dissolve that business afterwards.
Indexes developed by the Heritage Foundation, Fraser Institute, and Cato Institute, on the other hand, use measures of the strength of legal institutions, of government involvement in the economy, of regulations, and of the openness of markets to develop a ranking of economic freedom. Though they differ in emphasis, panelists revealed that these economic indexes represent an important way that economists are now examining institutions -- and economic liberty in particular -- as important influencers of growth and prosperity in today's world.
Download Audio as MP3 liberty can be difficult to define and even more challenging to measure. Each year, however, several groups release their rankings of economic liberty in different countries. How do they decide which factors to consider, and how accurate a picture do these rankings paint of the state of economic liberty in the world today?
Join AEI and the authors of economic liberty indices from the Heritage Foundation, Cato Institute, World Bank, and Fraser Institute for lunch and a discussion on quantifying economic freedom.
If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours.
Registration and Lunch
Michael R. Strain, AEI
Jim Gwartney, Florida State University and Cato Institute
Jean Michel Lobet, World Bank
Fred McMahon, Fraser Institute
Terry Miller, Heritage Foundation
Stan Veuger, AEI
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Jim Gwartney holds the Gus A. Stavros Eminent Scholar Chair at Florida State University, where he directs the Stavros Center for the Advancement of Free Enterprise and Economic Education. He is the coauthor of “Economics: Private and Public Choice,” now in its 14th edition, and “Common Sense Economics: What Everyone Should Know About Wealth and Prosperity” (St. Martin's Press, 2010). He is the senior researcher responsible for the preparation of the annual Fraser Institute and CATO Institute report “Economic Freedom of the World.” In 2004, he was the recipient of the Adam Smith Award of the Association of Private Enterprise Education for his contribution to the advancement of free-market ideals. He is a past president of the Southern Economic Association and previously served as chief economist of the Joint Economic Committee of the US Congress. His publications have appeared in both professional journals and popular media such as The Wall Street Journal and The New York Times.
Jean Michel Lobet is a senior private sector development specialist at the World Bank, where he joined the Doing Business team in October 2006. During his time at the World Bank, he has led research for the indicators on protecting investors, managed investment climate reform programs in Africa and Latin America, and has advised governments on company and securities law reform initiatives. In addition, he has led trainings and workshops on investment climate issues around the globe, including Colombia, Brunei, Rwanda, and the Dominican Republic. Before joining the World Bank, he held positions related to regulatory reform at the Inter-American Development Bank and the Organization of American States.
Fred McMahon is a Fraser Institute resident fellow and holder of the Dr. Michael A. Walker Research Chair in Economic Freedom. He manages the Economic Freedom of the World Project and coordinates the Economic Freedom Network, an international alliance of 86 independent think tanks around the world. His research focuses on global issues such as development, trade, governance, and economic structure. McMahon is the author of numerous research articles and several books including “Looking the Gift Horse in the Mouth: The Impact of Federal Transfers on Atlantic Canada” (Atlantic Institute for Market Studies, 1996), which won the Sir Antony Fisher International Memorial Award for advancing public policy debate; “Road to Growth: How Lagging Economies Become Prosperous” (Atlantic Institute for Market Studies, 2000); and “Retreat from Growth: Atlantic Canada and the Negative Sum Economy” (Atlantic Institute for Market Studies, 2000). He has written for numerous publications including European Journal of Political Economy, SAIS Journal (School of Advanced International Studies, Johns Hopkins University), The Wall Street Journal, Policy Options, National Post, Time (Canada), Globe and Mail, Ottawa Citizen, and most other major Canadian newspapers.
Terry Miller is the director of the Center for International Trade and Economics (CITE) and the Mark A. Kolokotrones Fellow in Economic Freedom at the Heritage Foundation, where he directs the center’s ongoing research into the role of free markets and international trade in fostering economic growth around the world. The center’s signature publication in this area is the annual “Index of Economic Freedom,” a country-by-country guide copublished with The Wall Street Journal. Before joining Heritage in October 2007, Miller served as ambassador to the United Nations Economic and Social Council. Previously, he served as deputy assistant secretary of state for economic and global issues and as head of the US observer mission to the UN Educational, Scientific and Cultural Organization. He also headed the US delegation to the UN Conference on Trade and Development in 2004 and was the lead negotiator for the Monterrey Consensus on Financing for Development.
Michael R. Strain is a resident scholar at AEI. His academic research papers and policy papers study labor economics, applied microeconomics, and public finance. His work has appeared in the Journal of Money, Credit, and Banking; Tax Notes; and National Review, among other publications. Before joining AEI, he was the manager of the New York Census Research Data Center and an economist with the Center for Economic Studies at the US Census Bureau. Previously, he was a member of the research group of Census's Longitudinal Employer-Household Dynamics Program and worked in the macroeconomics research group at the Federal Reserve Bank of New York.
Stan Veuger is a resident scholar at AEI. His academic research focuses on political economy and applied microeconomics, and has been published in the Quarterly Journal of Economics. He writes frequently for popular audiences on a variety of topics, including policy uncertainty, Obamacare, and tax policy. He is a regular contributor to US News and World Report and writes frequently for AEIdeas, AEI’s policy blog. Before joining AEI, Veuger was a teaching fellow at the Harvard Kennedy School, Harvard College, and Universitat Pompeu Fabra. He is a board member of the Netherland-American Foundation in Washington, DC, and was a National Review Institute Washington Fellow.