Fraser Institute Report Confirms the U.S. has Strong but Slipping Property Rights.
The Fraser Institute , a free market think tank, has recently released its annual The Economic Freedom of the World Report. As the title suggests, this report measures the economic freedom of 141 countries using five categories: size of government, legal structure and security of property rights, access to sound money, freedom to trade internationally, and regulation of credit, labor and business. Hong Kong remained number one on the list, a position it has held for nearly 25 years, followed by Singapore and New Zealand.
The report shows a worrying trend for the United States. America’s economic freedom rank has fallen from 4th in the year 2000 to 10th in 2011. Even more concerning, the U.S. fell 3 spots in each of the last two years, implying that it is on a strongly negative path. The fall in rankings can be attributed primarily to three areas: security of property rights, access to sound money and freedom to trade internationally.
These results are broadly consistent with the International Property Rights Index (IPRI) produced here at the Property Rights Alliance. We too find that the United States is in a strong position in its protection of property rights, but not the strongest, ranking it 18th overall in 2011. The falling in property rights rankings in both indexes has been due to a deteriorating legal environment in the United States as property rights have not been consistently upheld by the court system. Abuses of eminent domain have been one of the largest problems in this category.
The Economic Freedom of the World report should serve as a reminder that we need to strengthen our property rights and increase our economic freedom. The report notes, as does the IPRI, that Nobel economists such as Friedrich Hayek, Milton Friedman and Gary Becker have consistently found that economic freedom produces economic prosperity and increases general wellbeing. On the other hand, citizens such as Susette Kelo can attest to the pain that is caused when these rights are forgotten.