IN EARLY October we saw the release of this year’s Economic Freedom of the World report. The index tracks 152 countries, ranking how supportive their laws and institutions are with regard to certain economic freedoms such as personal choice, voluntary exchange, freedom to compete and security of private property. This year’s top five places go to: Hong Kong, Singapore, New Zealand, Switzerland and Mauritius (the first time an African country appears in the top five). At the bottom of the rankings are Venezuela, Republic of Congo, Argentina, Zimbabwe and Algeria. The index assumes that economic freedoms matter. More than 400 studies have used the index as a variable to see how it affects outcomes we are interested in. So what about SA’s result this year? Sadly, we continue our slide, falling from 89th last year to 93rd in 2014. The subcategories of the index tell the story. We rank 142nd in the hiring and firing category and 139th in the area of collective bargaining regulations. SA ranks in the bottom quintile for business costs of crime, capital controls, hiring regulations, and minimum wage controls; and most importantly, general size of government and its parastatals. If SA were aiming at a highly interventionist, developmental state, it can boast success. The country ranks ninth in the world in terms of government consumption as a percentage of gross national product.
Posted on: Tue, 07 Oct 2014 07:17:40 +0000
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