Indexes of economic freedom – An outline and open issues

Abstract

Authors of the indexes of economic freedom argue that economic freedom is a key link to prosperity and growth. An outline of empirical and theoretical investigation into the relationships between economic performance and institutional environment shows that economic freedom is an important precondition for economic prosperity. Countries that have more economic freedom also tend to have higher rates of economic growth and are more prosperous. Author however in the article argues that economic policy advisers should use indexes of economic freedom with great caution, since they suffer from certain deficiencies with regard to their content.An author presents a detail political-economic analysis of economic freedom, through three pairs of concepts that emphasize and express two different conceptions of understanding of economic freedom, in order to show why presented index of economic freedom cannot be sufficient indicators of economic freedom and prosperity.

Keywords

• Institutional environment
• Economic freedom
• Indexes of economic freedom
• Economic performance