Many of us who live in the Free World recognize that free government, free exchange, free expression, free markets and free trade deliver better outcomes than autocracy, autarky, control, conformity and coercion. However, among those who have come of age in the decades since the end of the Cold War, there is neither an innate sense that freedom is better than the alternative nor a default belief in the power of individual liberty. Consider that nearly 50 percent of American adults born since 1981 (the Millennial Generation and Generation Z) would “prefer living in a socialist country,” while more than 50 percent of Millennials reject capitalism outright. Sizable portions of these cohorts even have positive views of communism.
For a time, the Soviet system’s collapse served as proof not just of the superiority of free government and free exchange, but of the futility of government by coercion and economics by top-down control. Yet with younger generations lacking the firsthand memory and historical understanding of socialism’s intrinsic shortcomings and communism’s terrifying excesses, capitalism has become a four-letter word in many circles. This is deeply concerning for the cause of freedom. By comparing and contrasting pairs of countries that share borders, neighborhoods and/or histories across various measures of overall national health, the following survey of surveys aims to help remedy this under-appreciation for freedom.
South Korea and North Korea There’s no more exquisite proof of the superiority of freedom than the Korean Peninsula. After all, here’s one nationality divided into two countries, two forms of government, two economic systems. One is free and connected to the world, the other enslaved and isolated. The difference is breathtaking.
political freedom: South Korea 83 Free, North Korea 3 Not Free (highest score is 100)
economic freedom: South Korea 43rd, North Korea unmeasured/unranked
personal liberty: South Korea 31st, North Korea unmeasured/unranked
property rights: South Korea 28th, North Korea unmeasured/unranked
happiness: South Korea 59th, North Korea unmeasured/unranked
per capita GDP: South Korea $44,621 27th, North Korea $1,716 (equal to 184th; most measures do not rank North Korea)
life expectancy: South Korea 83.5, North Korea 72.8
environmental performance: South Korea 63rd, North Korea unmeasured/unranked
corruption: South Korea 32nd, North Korea 174th (higher ranking indicates lower corruption)
rule of law: South Korea 29th, North Korea 183rd
women’s empowerment: South Korea 33rd, North Korea unmeasured/unranked
children’s health/wellbeing: South Korea 2nd, North Korea 112th
Lithuania and Russia Russian strongman Vladimir Putin claims things were better when Lithuania—and Ukraine, Poland and the eastern half of Europe, for that matter—were under Moscow’s heel. The free peoples of these lands would beg to differ, and the numbers illustrate why.
political freedom: Lithuania 89 Free, Russia 19 Not Free
economic freedom: Lithuania 12th, Russia 94th -personal liberty: Lithuania 19th, Russia 126th
property rights: Lithuania 36th, Russia 85th -happiness: Lithuania 34th, Russia 80th
per capita GDP: Lithuania $38,824 37th, Russia $27,903 53rd
children’s health/wellbeing: Slovenia 25th, Serbia 48th
Croatia and Serbia Croatia, too, was lashed to the carcass of a Serbia-dominated Yugoslavia. Unlike Slovenia, it was badly scarred by the wars Milosevic unleashed on his neighbors. Yet Croatia’s more freedom-oriented policy choices have enabled Croatia to leap ahead of Serbia.
political freedom: Croatia 85 Free, Serbia 62 Partly Free
economic freedom: Croatia 61st, Serbia 84th
personal liberty: Croatia 42nd, Serbia 67th
property rights: Croatia 65th, Serbia 80th
happiness: Croatia 47th, Serbia 43rd
per capita GDP: Croatia $27,717 54th, Serbia $19,146 71st
life expectancy: Croatia 79, Serbia 76.4
environmental performance: Croatia 16th, Serbia 79th
children’s health/wellbeing: Croatia 28th, Serbia 48th
Taiwan and the People’s Republic of China (PRC) As with the Koreas, Taiwan and the PRC are two countries that share the same language, ethnicity and history. And as with the Koreas, Taiwan’s pro-freedom policies and institutions have transformed the island into a healthy democracy and a vibrant economy.
Japan and the PRC These two Indo-Pacific neighbors are paired because the former embraces and supports the liberal democratic order, while the latter wants to usher in a new order that promises to be both less liberal and less democratic.
per capita GDP: Japan $42,248 30th, PRC $17,192 77th
life expectancy: Japan 85, PRC 77.4
environmental performance: Japan 25th, PRC 160th
corruption: Japan 25th, PRC 66th
rule of law: Japan 17th, PRC 84th
women’s empowerment: Japan 35th, PRC 89th
children’s health/wellbeing: Japan 7th, PRC 43rd
Hong Kong (pre-PRC takeover) and the PRC “Hong Kong remains the most economically-free jurisdiction in the world,” as my Fraser colleague Fred McMahon noted when the latest Economic Freedom of the World report was released. “But this ranking is based on 2020 data and more recent interference from China threatens to undermine Hong Kong’s rule of law, which helps ensure equal freedom for all.” Indeed, all of these measures for Hong Kong will soon sink to where the PRC is, which underscores the broader point of this survey of surveys: institutions, policies and political-economic systems matter.
The United States and the PRC Xi Jinping openly envisions refashioning the post-World War II liberal democratic order in the PRC’s image and aspires to dislodge the U.S. from its role leading the current liberal order. The PRC is a regime with the means and the will to do this, which should give the Free World pause. “The present order will last only as long as those who favor it and benefit from it retain the will and capacity to defend it,” as historian Robert Kagan observes. “Every international order in history has reflected the beliefs and interests of its strongest powers,” he explains. “And every international order has changed when power shifted to others with different beliefs and different interests.” The Free World does have the advantage of pointing to the PRC as an example of Xi’s vision for a made-in-China future.
per capita GDP: U.S. $63,416 7th, PRC $17,192 77th
life expectancy: U.S. 79.1, PRC 77.4
environmental performance: U.S. 43rd, PRC 160th
corruption: U.S. 27th, PRC 66th
rule of law: U.S. 22nd, PRC 84th
women’s empowerment: U.S. 21st, PRC 89th
children’s health/wellbeing: U.S. 39th, PRC 43rd
The United States and Russia Like Xi, Putin openly opposes the liberal democratic order, and he promises his subjects and conquered lands something better in the form of neo-czarist imperialism, cronyism, kleptocracy and l’etat c’est moi governance. Again, this doesn’t seem to be the wave of the future.
political freedom: U.S. 83 Free, Russia 19 Not Free
per capita GDP: U.S. $63,416 7th, Russia $27,903 53rd
life expectancy: U.S. 79.1, Russia 72.9
environmental performance: U.S. 43rd, Russia 112th
corruption: U.S. 27th, Russia 136th
rule of law: U.S. 22nd, Russia 152nd
women’s empowerment: U.S. 21st, Russia 53rd
children’s health/wellbeing: U.S. 39th, Russia 79th
India and the PRC This pairing is the lone anomaly in our comparisons. Perhaps India’s poor rankings are a function of the lack of institutional order, which is essential to human flourishing and liberty. Too much order, of course, is an enemy of liberty; it’s known as tyranny (the North Korea side of the spectrum). But too little order is just as corrosive to liberty; it’s known as chaos or anarchy (the Somalia side of the spectrum). India is not in an anarchic state. But it’s far from the ordered liberty that yields high scores in these rankings. If nothing else, this survey of survey underscores just how far from true political freedom and economic freedom the world’s largest democracy remains.
political freedom: India 66 Partly Free, PRC 9 Not Free
economic freedom: India 89th, PRC 116th
personal liberty: India 119th, PRC 150th
property rights: India 58th, PRC 47th
happiness: India 136th, PRC 72nd
per capita GDP: India 128th $6,461, PRC 77th $17,192
life expectancy: India 70.4, PRC 77.4
environmental performance: India 180th (last), PRC 160th
children’s health/wellbeing: India 131st, PRC 49th
India and Pakistan The India-Pakistan pairing illustrates that even a little order and a little freedom can make a big difference for individuals and nations.
political freedom: India 66 Partly Free, Pakistan 37 Partly Free
economic freedom: India 89th, Pakistan 130th
personal liberty: India 119th, Pakistan 145th
property rights: India 58th, Pakistan 108th
happiness: India 136th, Pakistan 121st
per capita GDP: India $6,461 128th, Pakistan $5,150 144th
life expectancy: India 70.4, Pakistan 67.7
environmental performance: India 180th, Pakistan 176th
corruption: India 85th, Pakistan 140th
rule of law: India 89th, Pakistan 138th
women’s empowerment: India 148th, Pakistan 167th
children’s health/wellbeing: India 131st, Pakistan 140th
Mexico and Venezuela Mexico and Venezuela are both resource-rich Latin American nations, and both boast coastlines and climates that should attract millions of tourists and generate billions of dollars. Mexico is anything but an exemplar of economic freedom and political freedom, yet it’s light years ahead of Venezuela. Even though Venezuela is among most resource-blessed places on earth—with 300 billion barrels of oil, 201 trillion cubic feet of natural gas, and vast stores of iron, bauxite, gold and nickel—it is impoverished and broken, because Chavez and Maduro chose coercion and control over freedom. Thus, no one vacations in Venezuela; the people of Venezuela are starving; Venezuela’s inflation rate is stratospheric; the resources needed to develop Venezuela’s resource wealth are sidelined; and only despair is in abundance in Venezuela. One recalls what Mikhail Gorbachev said as the Soviet Union collapsed around him: “I was ashamed for my country—perhaps the country with the richest resources on earth, and we couldn't provide toothpaste for our people.” Sadly, the enemies of freedom in Venezuela and elsewhere won't recall Gorbachev’s words because they refuse to be confused by the facts—and too many Millennials and Gen Zers can't recall Gorbachev's self-indicting lament, because they don’t know any history beyond yesterday's top-trending tweet.
political freedom: Mexico 60 Partly Free, Venezuela 14 Not Free
Jamaica and Cuba These Caribbean island neighbors have carved very different paths over the past 60 years.
political freedom: Jamaica 80 (Free), Cuba 12 (Not Free)
economic freedom: Jamaica 45th, Cuba unmeasured/unranked on Fraser’s economic freedom rankings (175th in Heritage Foundation’s, where Jamaica is 46th)
personal liberty: Jamaica 52nd, Cuba unmeasured/unranked
property rights: Jamaica 57th, Cuba unmeasured/unranked
happiness: Jamaica 63rd, Cuba unmeasured/unranked
per capita GDP: Jamaica $9,975 116th, Cuba unmeasured/unranked
life expectancy: Jamaica 74.8, Cuba 79.8
environmental performance: Jamaica 72nd, Cuba 60th
corruption: Jamaica 70th, Cuba 64th
rule of law: Jamaica 98th, Cuba unmeasured/unranked
women’s empowerment: Jamaica 43rd, Cuba unmeasured/unranked
children’s health/wellbeing: Jamaica 92nd, Cuba 46th
Dominican Republic and Haiti Not unlike the Koreas, the Dominican Republic and Haiti share the same space and resources, the same historical and geographic challenges, the same opportunities. Yet because of their systems and institutions, the former is far better off than the latter.
political freedom: D.R. 68 Partly Free, Haiti 33 Not Free
economic freedom: D.R. 48th, Haiti 96th
personal liberty: D.R. 54th, Haiti 80th
property rights: D.R. 87th, Haiti 127th
happiness: D.R. 69th, Haiti unmeasured/unranked
per capita GDP: D.R. $18,608 74th, Haiti $2,916 164th
life expectancy: D.R. 74.6, Haiti 64.9
environmental performance: D.R. 89th, Haiti 173rd
corruption: D.R. 128th, Haiti 164th -rule of law: D.R. 93rd, Haiti 174th
women’s empowerment: D.R. 71st, Haiti 142nd
children’s health/wellbeing: D.R. 115th, Haiti 151st
Panama and Nicaragua These Central American neighbors share many of the same historical and geographic challenges, but the freer of the two is far healthier.
political freedom: Panama 83 Free, Nicaragua 23 Not Free
economic freedom: Panama 41st, Nicaragua 82nd
personal liberty: Panama 44th, Nicaragua 125th
property rights: Panama 68th, Nicaragua 119th
happiness: Panama 37th, Nicaragua 45th
per capita GDP: Panama $27,003 56th, Nicaragua $5,575 136th
life expectancy: Panama 79.1, Nicaragua 75.2
environmental performance: Panama 47th, Nicaragua 110th
corruption: Panama 105th, Nicaragua 164th
rule of law: Panama 105th, Nicaragua 178th
women’s empowerment: Panama 83rd, Nicaragua 63rd
children’s health/wellbeing: Panama 102nd, Nicaragua 101st
Israel and Iran Geographically tiny Israel and sprawling Iran have little in common. After all, one is an Islamist theocracy that governs by coercion, demands societal conformity and micromanages economic activity. The other is an exponent of political and religious pluralism, consensus-based government, and liberal economic principles. These two poles of the Middle East offer dramatically different models for their neighbors. The irony is that Iran was, once upon a time, more like Israel—and far freer and more prosperous as a result.
political freedom: Israel 76 Free, Iran 14 Not Free
economic freedom: Israel 49th, Iran 159th
personal liberty: Israel 62nd, Iran 160th (out of 165)
property rights: Israel 25th, Iran 113th
happiness: Israel 9th, Iran 110th
per capita GDP: Israel $40,547 35th, Iran $13,073 96th
life expectancy: Israel 83.4, Iran 77.3
environmental performance: Israel 57th, Iran 133rd
corruption: Israel 36th, Iran 150th
rule of law: Israel 33rd, Iran 158thth
women’s empowerment: Israel 27th, Iran 125th
children’s health/wellbeing: Israel 24th, Iran 63rd
UAE and Iran The UAE has far to go on political freedom, but it is far ahead of Iran on measures of economic freedom, property rights and rule of law. Indeed, unlike both Iran and Russia, the UAE (which is also a petroleum-exporting state) has embraced a high level of economic freedom. McMahon notes how this has enabled it to “establish a strong commercial base and two of the world's most important commercial centers, Dubai and Abu Dhabi.” If Iran (and Russia) took a similar path of diversification, it would open the way to economic growth and economic opportunity.
political freedom: UAE 17 Not Free, Iran 14 Not Free
economic freedom: UAE 49th, Iran 159th
personal liberty: UAE 131st, Iran 160th
property rights: UAE 22nd, Iran 113th
happiness: UAE 24th, Iran 110th
per capita GDP: UAE $58,753 11th, Iran $13,073 96th
life expectancy: UAE 78.4, Iran 77.3
environmental performance: UAE 39th, Iran 133rd
corruption: UAE 24th, Iran 150th
rule of law: UAE 42nd, Iran 158th
women’s empowerment: UAE 24th, Iran 125th
children’s health/wellbeing: UAE 49th, Iran 63rd
Tunisia and Egypt The Arab Spring revolutions began in Tunisia, after a police officer confiscated Mohammed Bouazizi’s vegetable cart because he didn’t have a proper permit. When the young merchant tried to pay the fine, the officer slapped him and spat on him. When Bouazizi tried to appeal to the officer’s higher-ups, he was denied a hearing and finally had enough of abusive, capricious, intrusive government. The humiliation and hopelessness—caused by government interference in his livelihood—overwhelmed Bouazizi to the point that he set himself on fire. Bouazizi may have never read Hayek or Locke, but what he was seeking was economic freedom—the freedom to use and exchange his property as he deemed appropriate. His death sparked a revolution that toppled dictators from Tunisia to Egypt. Egypt slid into an illiberal majoritarian despotism and then reverted back to business-suit autocracy. Tunisia has experienced its share of challenges since Bouazizi’s revolution, but it is freer and healthier on most measures than Egypt.
political freedom: Tunisia 64 Partly Free, Egypt 18 Not Free
economic freedom: Tunisia 128th, Egypt 150th
personal liberty: Tunisia 116th, Egypt 161st
property rights: Tunisia 76th, Egypt 70th
happiness: Tunisia 120th, Egypt 129th
per capita GDP: Tunisia $10,120 114th, Egypt $12,790 99th
Botswana and Zimbabwe Botswana and Zimbabwe are next-door neighbors but considerably different due to their institutions, systems and policies. In fact, McMahon points out that Botswana “has consistently had the highest level of economic freedom in mainland sub-Sahara Africa. It started poorer than the average sub-Sahara African nation in 1960 and is now richer than the average.”
political freedom: Botswana 72 Free, Zimbabwe 28 Not Free
economic freedom: Botswana 49th, Zimbabwe 163rd
personal liberty: Botswana 120th, Zimbabwe 147th
property rights: Botswana 56th, Zimbabwe 124th
happiness: Botswana 142nd, Zimbabwe 144th
per capita GDP: Botswana $16,893 78th, Zimbabwe $2,622 168th
Mauritius and Madagascar These two are paired given that they’re relatively isolated islands—at least geographically—with distant ties to France and Western governance structures. Yet one is far healthier than the other.
political freedom: Mauritius 86 Free, Madagascar 61 Partly Free
economic freedom: Mauritius 9th, Madagascar 127th
personal liberty: Mauritius 46th, Madagascar 88th
property rights: Mauritius 41st, Madagascar 115th
happiness: Mauritius 52nd, Madagascar 128th
per capita GDP: Mauritius 65th $20,292, Madagascar 185th $1,599
Better Halves What’s true of those side-by-side “neighborhood” comparisons holds true across the board and around the world: Economic freedom and political freedom deliver better outcomes than the alternatives. Importantly, economic freedom—which the Fraser Institute defines as “personal choice, voluntary exchange, freedom to compete and security of privately owned property”—buttresses political freedom. Backed by some 30 years of empirical studies, Fraser researchers call economic freedom “a necessary condition for democratic development.”
Indeed, after sifting through hundreds of peer-reviewed scholarly studies that cite Fraser’s Economic Freedom of the World, Robert Lawson (director of SMU’s Bridwell Institute for Economic Freedom) reports that the vast majority of the studies “find a link between high or increasing levels of economic freedom with gains in prosperity and other measures of wellbeing.” His findings are compelling: 72.5 percent of those studies conclude that economic freedom is related to increases in income or productivity; 66.3 percent conclude that economic freedom is related to increased economic growth; 62.9 percent conclude that economic freedom is related to increased entrepreneurship and innovation; 60 percent conclude that economic freedom is related to reduced conflict; 53.3 percent conclude that economic freedom leads to improved labor market outcomes; 52.9 percent conclude that economic freedom is related to improved human rights (only 4.4 percent claim a negative relationship); 43.3 percent conclude that economic freedom is related to reduced corruption (only 6.7 percent argue that economic freedom is related to increases in corruption); 41.7 percent conclude that economic freedom is related to improved environmental outcomes (only 16.7 percent claim a negative relationship).
Some might ask, “Couldn’t the better halves of the above pairings simply be the product of good fortune, advantageous geographic placement, and/or an abundance of the resources needed to fuel economic expansion and promote consensus-based governance—and the lesser halves the product of bad luck, disadvantageous geography and/or a lack those resources?”
It’s a fair question. But the evidence strongly suggests that it is governance, policies, and political and economic institutions—rule of law, property rights, economic freedom, majority rule with minority rights, constitutionalism, etc.—which produce healthy, successful nation-states. After all, the lesser halves of the above pairings cannot blame their problems on size (see Israel), geopolitical isolation (see Taiwan), geographic isolation (see Mauritius), cramped population (see Mauritius, Israel), sparse population (see Lithuania), lack of natural resources (see Japan), high ethnic diversity (see the U.S.), low ethnic diversity (see Japan, South Korea), troubled history (see South Korea, Croatia, Israel), or dangerous neighborhoods and/or unstable neighbors (see Israel, Lithuania, South Korea).
Indeed, there’s no better case for freedom than the Korean Peninsula. The difference, as detailed above, is staggering. We can gloss over the numerical comparisons. But institutions, policies and political-economic systems have real-world impacts. Consider that almost seven in ten North Koreans depend for their survival on government rations of barley, corn and rice. The results, as former director of the World Food Program James Morris observes, are as tragic as they are avoidable: “The average seven-year-old North Korean boy is eight inches shorter, 20 pounds lighter, and has a ten-year-shorter-life expectancy than his seven-year-old counterpart in South Korea.”
Both halves of the peninsula were devastated by war and dominated by dictatorship. But today, South Korea protects property rights, lives under the rule of law, and practices economic and political freedom. North Korea lives under a tyranny that controls all property and smothers all forms of freedom. And so, seven decades after starting from the very same place, South Korea’s people are thriving in an ecosystem of freedom, while North Korea’s are starving under the most backward and brutal tyranny on earth.
The Health of Nations These back-of-envelope comparisons are not exhaustive or scientific, but they are revealing and representative of what works—and what doesn’t. They remind us that economic freedom and political freedom are not abstractions. They are powerful forces with real-world implications. Their presence makes a positive difference in the lives of individuals and in the health of nations. Their absence shackles individuals and corrodes the nations in which they live.
Our world and our lives are better today than during the Cold War because more countries have embraced economic freedom and political freedom. If up-and-coming generations don’t grasp these truths, their lives and their world will be far worse.
Commentary
Freedom and the Health of Nations
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Many of us who live in the Free World recognize that free government, free exchange, free expression, free markets and free trade deliver better outcomes than autocracy, autarky, control, conformity and coercion. However, among those who have come of age in the decades since the end of the Cold War, there is neither an innate sense that freedom is better than the alternative nor a default belief in the power of individual liberty. Consider that nearly 50 percent of American adults born since 1981 (the Millennial Generation and Generation Z) would “prefer living in a socialist country,” while more than 50 percent of Millennials reject capitalism outright. Sizable portions of these cohorts even have positive views of communism.
For a time, the Soviet system’s collapse served as proof not just of the superiority of free government and free exchange, but of the futility of government by coercion and economics by top-down control. Yet with younger generations lacking the firsthand memory and historical understanding of socialism’s intrinsic shortcomings and communism’s terrifying excesses, capitalism has become a four-letter word in many circles. This is deeply concerning for the cause of freedom. By comparing and contrasting pairs of countries that share borders, neighborhoods and/or histories across various measures of overall national health, the following survey of surveys aims to help remedy this under-appreciation for freedom.
South Korea and North Korea
There’s no more exquisite proof of the superiority of freedom than the Korean Peninsula. After all, here’s one nationality divided into two countries, two forms of government, two economic systems. One is free and connected to the world, the other enslaved and isolated. The difference is breathtaking.
Lithuania and Russia
Russian strongman Vladimir Putin claims things were better when Lithuania—and Ukraine, Poland and the eastern half of Europe, for that matter—were under Moscow’s heel. The free peoples of these lands would beg to differ, and the numbers illustrate why.
Poland and Russia
A similar picture emerges in comparing Russia and another of Moscow’s former vassals, Poland.
Slovenia and Serbia
Slovenia and Serbia are instructive in that they were both once constituent parts of Yugoslavia.
Croatia and Serbia
Croatia, too, was lashed to the carcass of a Serbia-dominated Yugoslavia. Unlike Slovenia, it was badly scarred by the wars Milosevic unleashed on his neighbors. Yet Croatia’s more freedom-oriented policy choices have enabled Croatia to leap ahead of Serbia.
Taiwan and the People’s Republic of China (PRC)
As with the Koreas, Taiwan and the PRC are two countries that share the same language, ethnicity and history. And as with the Koreas, Taiwan’s pro-freedom policies and institutions have transformed the island into a healthy democracy and a vibrant economy.
Japan and the PRC
These two Indo-Pacific neighbors are paired because the former embraces and supports the liberal democratic order, while the latter wants to usher in a new order that promises to be both less liberal and less democratic.
Hong Kong (pre-PRC takeover) and the PRC
“Hong Kong remains the most economically-free jurisdiction in the world,” as my Fraser colleague Fred McMahon noted when the latest Economic Freedom of the World report was released. “But this ranking is based on 2020 data and more recent interference from China threatens to undermine Hong Kong’s rule of law, which helps ensure equal freedom for all.” Indeed, all of these measures for Hong Kong will soon sink to where the PRC is, which underscores the broader point of this survey of surveys: institutions, policies and political-economic systems matter.
The United States and the PRC
Xi Jinping openly envisions refashioning the post-World War II liberal democratic order in the PRC’s image and aspires to dislodge the U.S. from its role leading the current liberal order. The PRC is a regime with the means and the will to do this, which should give the Free World pause. “The present order will last only as long as those who favor it and benefit from it retain the will and capacity to defend it,” as historian Robert Kagan observes. “Every international order in history has reflected the beliefs and interests of its strongest powers,” he explains. “And every international order has changed when power shifted to others with different beliefs and different interests.” The Free World does have the advantage of pointing to the PRC as an example of Xi’s vision for a made-in-China future.
The United States and Russia
Like Xi, Putin openly opposes the liberal democratic order, and he promises his subjects and conquered lands something better in the form of neo-czarist imperialism, cronyism, kleptocracy and l’etat c’est moi governance. Again, this doesn’t seem to be the wave of the future.
India and the PRC
This pairing is the lone anomaly in our comparisons. Perhaps India’s poor rankings are a function of the lack of institutional order, which is essential to human flourishing and liberty. Too much order, of course, is an enemy of liberty; it’s known as tyranny (the North Korea side of the spectrum). But too little order is just as corrosive to liberty; it’s known as chaos or anarchy (the Somalia side of the spectrum). India is not in an anarchic state. But it’s far from the ordered liberty that yields high scores in these rankings. If nothing else, this survey of survey underscores just how far from true political freedom and economic freedom the world’s largest democracy remains.
India and Pakistan
The India-Pakistan pairing illustrates that even a little order and a little freedom can make a big difference for individuals and nations.
Mexico and Venezuela
Mexico and Venezuela are both resource-rich Latin American nations, and both boast coastlines and climates that should attract millions of tourists and generate billions of dollars. Mexico is anything but an exemplar of economic freedom and political freedom, yet it’s light years ahead of Venezuela. Even though Venezuela is among most resource-blessed places on earth—with 300 billion barrels of oil, 201 trillion cubic feet of natural gas, and vast stores of iron, bauxite, gold and nickel—it is impoverished and broken, because Chavez and Maduro chose coercion and control over freedom. Thus, no one vacations in Venezuela; the people of Venezuela are starving; Venezuela’s inflation rate is stratospheric; the resources needed to develop Venezuela’s resource wealth are sidelined; and only despair is in abundance in Venezuela. One recalls what Mikhail Gorbachev said as the Soviet Union collapsed around him: “I was ashamed for my country—perhaps the country with the richest resources on earth, and we couldn't provide toothpaste for our people.” Sadly, the enemies of freedom in Venezuela and elsewhere won't recall Gorbachev’s words because they refuse to be confused by the facts—and too many Millennials and Gen Zers can't recall Gorbachev's self-indicting lament, because they don’t know any history beyond yesterday's top-trending tweet.
Jamaica and Cuba
These Caribbean island neighbors have carved very different paths over the past 60 years.
Dominican Republic and Haiti
Not unlike the Koreas, the Dominican Republic and Haiti share the same space and resources, the same historical and geographic challenges, the same opportunities. Yet because of their systems and institutions, the former is far better off than the latter.
Panama and Nicaragua
These Central American neighbors share many of the same historical and geographic challenges, but the freer of the two is far healthier.
Israel and Iran
Geographically tiny Israel and sprawling Iran have little in common. After all, one is an Islamist theocracy that governs by coercion, demands societal conformity and micromanages economic activity. The other is an exponent of political and religious pluralism, consensus-based government, and liberal economic principles. These two poles of the Middle East offer dramatically different models for their neighbors. The irony is that Iran was, once upon a time, more like Israel—and far freer and more prosperous as a result.
UAE and Iran
The UAE has far to go on political freedom, but it is far ahead of Iran on measures of economic freedom, property rights and rule of law. Indeed, unlike both Iran and Russia, the UAE (which is also a petroleum-exporting state) has embraced a high level of economic freedom. McMahon notes how this has enabled it to “establish a strong commercial base and two of the world's most important commercial centers, Dubai and Abu Dhabi.” If Iran (and Russia) took a similar path of diversification, it would open the way to economic growth and economic opportunity.
Tunisia and Egypt
The Arab Spring revolutions began in Tunisia, after a police officer confiscated Mohammed Bouazizi’s vegetable cart because he didn’t have a proper permit. When the young merchant tried to pay the fine, the officer slapped him and spat on him. When Bouazizi tried to appeal to the officer’s higher-ups, he was denied a hearing and finally had enough of abusive, capricious, intrusive government. The humiliation and hopelessness—caused by government interference in his livelihood—overwhelmed Bouazizi to the point that he set himself on fire. Bouazizi may have never read Hayek or Locke, but what he was seeking was economic freedom—the freedom to use and exchange his property as he deemed appropriate. His death sparked a revolution that toppled dictators from Tunisia to Egypt. Egypt slid into an illiberal majoritarian despotism and then reverted back to business-suit autocracy. Tunisia has experienced its share of challenges since Bouazizi’s revolution, but it is freer and healthier on most measures than Egypt.
Botswana and Zimbabwe
Botswana and Zimbabwe are next-door neighbors but considerably different due to their institutions, systems and policies. In fact, McMahon points out that Botswana “has consistently had the highest level of economic freedom in mainland sub-Sahara Africa. It started poorer than the average sub-Sahara African nation in 1960 and is now richer than the average.”
Mauritius and Madagascar
These two are paired given that they’re relatively isolated islands—at least geographically—with distant ties to France and Western governance structures. Yet one is far healthier than the other.
Better Halves
What’s true of those side-by-side “neighborhood” comparisons holds true across the board and around the world: Economic freedom and political freedom deliver better outcomes than the alternatives. Importantly, economic freedom—which the Fraser Institute defines as “personal choice, voluntary exchange, freedom to compete and security of privately owned property”—buttresses political freedom. Backed by some 30 years of empirical studies, Fraser researchers call economic freedom “a necessary condition for democratic development.”
Indeed, after sifting through hundreds of peer-reviewed scholarly studies that cite Fraser’s Economic Freedom of the World, Robert Lawson (director of SMU’s Bridwell Institute for Economic Freedom) reports that the vast majority of the studies “find a link between high or increasing levels of economic freedom with gains in prosperity and other measures of wellbeing.” His findings are compelling: 72.5 percent of those studies conclude that economic freedom is related to increases in income or productivity; 66.3 percent conclude that economic freedom is related to increased economic growth; 62.9 percent conclude that economic freedom is related to increased entrepreneurship and innovation; 60 percent conclude that economic freedom is related to reduced conflict; 53.3 percent conclude that economic freedom leads to improved labor market outcomes; 52.9 percent conclude that economic freedom is related to improved human rights (only 4.4 percent claim a negative relationship); 43.3 percent conclude that economic freedom is related to reduced corruption (only 6.7 percent argue that economic freedom is related to increases in corruption); 41.7 percent conclude that economic freedom is related to improved environmental outcomes (only 16.7 percent claim a negative relationship).
Some might ask, “Couldn’t the better halves of the above pairings simply be the product of good fortune, advantageous geographic placement, and/or an abundance of the resources needed to fuel economic expansion and promote consensus-based governance—and the lesser halves the product of bad luck, disadvantageous geography and/or a lack those resources?”
It’s a fair question. But the evidence strongly suggests that it is governance, policies, and political and economic institutions—rule of law, property rights, economic freedom, majority rule with minority rights, constitutionalism, etc.—which produce healthy, successful nation-states. After all, the lesser halves of the above pairings cannot blame their problems on size (see Israel), geopolitical isolation (see Taiwan), geographic isolation (see Mauritius), cramped population (see Mauritius, Israel), sparse population (see Lithuania), lack of natural resources (see Japan), high ethnic diversity (see the U.S.), low ethnic diversity (see Japan, South Korea), troubled history (see South Korea, Croatia, Israel), or dangerous neighborhoods and/or unstable neighbors (see Israel, Lithuania, South Korea).
Indeed, there’s no better case for freedom than the Korean Peninsula. The difference, as detailed above, is staggering. We can gloss over the numerical comparisons. But institutions, policies and political-economic systems have real-world impacts. Consider that almost seven in ten North Koreans depend for their survival on government rations of barley, corn and rice. The results, as former director of the World Food Program James Morris observes, are as tragic as they are avoidable: “The average seven-year-old North Korean boy is eight inches shorter, 20 pounds lighter, and has a ten-year-shorter-life expectancy than his seven-year-old counterpart in South Korea.”
Both halves of the peninsula were devastated by war and dominated by dictatorship. But today, South Korea protects property rights, lives under the rule of law, and practices economic and political freedom. North Korea lives under a tyranny that controls all property and smothers all forms of freedom. And so, seven decades after starting from the very same place, South Korea’s people are thriving in an ecosystem of freedom, while North Korea’s are starving under the most backward and brutal tyranny on earth.
The Health of Nations
These back-of-envelope comparisons are not exhaustive or scientific, but they are revealing and representative of what works—and what doesn’t. They remind us that economic freedom and political freedom are not abstractions. They are powerful forces with real-world implications. Their presence makes a positive difference in the lives of individuals and in the health of nations. Their absence shackles individuals and corrodes the nations in which they live.
Our world and our lives are better today than during the Cold War because more countries have embraced economic freedom and political freedom. If up-and-coming generations don’t grasp these truths, their lives and their world will be far worse.
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Alan Dowd
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