Where it can be managed – and where less
Business needs a functioning legal system, a lean but effective state, sensible regulation and open markets.
The Heritage Foundation, a Washington-based liberal think tank, regularly publishes its Index of Economic Freedom. The good thing – and the dangerous thing – is that Switzerland are in the top group, but that invites complacency. The four countries with index values above 80 are small and nimble. Only Ireland is part of a large trading bloc, the EU. ASEAN, to which Singapore belongs, is a loose structure, and Taiwan has to fend for itself. The United States and Germany are at least in the next group, more than 70. Does the Green Party-led Berlin Ministry of Economic Affairs even pay attention to the light green ranking in this traffic light? The European heavyweights of the UK, France and Italy are alarmingly mediocre (and unable to reform). The famous Brics – Brazil, Russia, India, China, South Africa – are backward in terms of free trade. The Heritage Foundation measures economic freedom using twelve quantitative and qualitative factors grouped into four categories: rule of law (property rights, integrity of government, judicial efficiency), size of government (public spending, fiscal pressure, health tax), regulatory efficiency (freedom of enterprise, work, currency), open markets (freedom of trade, investment, financial freedom).
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