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Final Report of the Economic Freedom Index Names El Salvador and Costa Rica as Leaders

Article Summary:

The final report of the Economic Freedom Index of the Heritage Foundation and The Wall Street Journal shows El Salvador and Costa Rica lead the region in economic freedom. The index evaluates 10 indicators in four groups: rule of law, limited government, regulatory efficiency and openness of markets.

Photo Credit: Revista Summa

Original Article Text From Revista Summa via Google Translate :

El Salvador and Costa Rica first in the region in Index of Economic Freedom

The final report of the Economic Freedom Index of the Heritage Foundation and The Wall Street Journal that measures the degree of freedom of 184 economies in the world shows to El Salvador and Costa Rica in the first places in Central America, however, the first country dropped two places in the previous year and is ranked 41, while the country tico improved five positions and ranks 44.

Panama (55), Dominican Republic (89) and Honduras (93) also improved in the evaluation of this year, for its part, Guatemala (82) and Nicaragua (101) fell relative to 2011. The nations of the region is mostly located within the categories of “mostly free” and “moderately free”.

Chile and Uruguay are the best qualified nations of Latin America, ranking 7 and 29 respectively, the first places are occupied Hong Kong, Singapore and Australia.

“The countries of South America, Central America and the Caribbean have scores below the world average in six components of economic freedom, in particular, freedom from corruption and property rights, crucial components for the State of law, “says the report.

The overall average score on economic freedom index 2012 is 59.5, indicating a decrease of 0.2 points in the previous year and equivalent to the second lowest level of the last 10 years.

“The global economic freedom declined during the past year. Tension between government control and the free market has increased worldwide, particularly in developed countries. By weakening the achievements effort years ago with respect to economic freedom, the growing burden of uncontrolled government spending surpassed, in many cases, the gains in economic freedom achieved in other policy areas, “says the report.

Balance Sheet
Overall, the study reveals that the quality of public finances has deteriorated seriously, especially in advanced economies, excessive government spending has led to increased public debt and economic stagnation. There is also a reduction in scores on the category of rule of law due to corruption and the deterioration of respect for property rights.

“The levels of economic freedom related to regulatory efficiency and open markets experienced a slight improvement, but was unchanged labor freedom and freedom of trade declined. The largest average increase was seen in the monetary freedom, as many countries improved their economic stability by controlling inflationary pressure, “says the report.

Index published annually since 1996 and evaluates 10 indicators in four groups: rule of law, limited government, regulatory efficiency and openness of markets.

The study is important to note:
It can be deduced that the gross domestic product (GDP) per capita is much higher in countries with greater economic freedom also exists a close correlation between economic freedom and higher effective elimination of poverty.

The advance of economic freedom is crucial for people to achieve greater prosperity.

Economic freedom is highly correlated with entrepreneurial activity that creates new jobs and increased opportunities and choices of people to improve their own welfare.

The rapid expansion of government appears to be responsible, more than any other factor market dynamism that the economic decay.

Link to Original Article:

From Revista Summa

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