Free to Grow.

• Author: Gillespie, Nick
• Position: Robert Lawson on economic freedom - Brief Article - Interview

Which country has the most economic freedom? That's the question economists James Gwartney of Florida State University and Robert Lawson of Capital University set out to answer each year in Economic Freedom of the World. Published by Canada's Fraser Institute, the latest edition, which tracks nations through 1999, is out and available online at www.freetheworld.com.

Gwartney and Lawson, who were assisted by American University's Walter Park and Florida State grad student Charles Skipton, analyze data collected from dozens of international sources to rank 123 countries on measures including the size of government, top marginal tax rates, interest rate controls, and the freedom of citizens to use alternative currencies. Topping their list is Hong Kong, followed by Singapore and the U.S. Rounding out the bottom are Syria, Uganda, Russia, and Myanmar.

REASON Editor-in-Chief Nick Gillespie spoke with Robert Lawson in early June.

Q: Over the past decade, has there been a general gain in economic freedom?

A: Yes. In an absolute sense, most countries are improving--there has been worldwide binge in cutting marginal tax rates, for instance. Economic freedom correlates strongly with higher incomes, economic growth, and increased standards of living. Standing pat in this environment is like going backward, which is one reason Mexico has dropped from a 35 ranking to a 62 ranking over the past decade; it didn't really do that much to liberalize its economy. Ireland, on the other hand, actually cut the size of its government--and now has the fastest-growing economy in Western Europe.

Q: How do countries free up their economies?

A: Some countries, such as...