JIMS attributes Israel's poor ranking in this year's report to a growing public sector. Last year Israel was ranked number 44
Israel ranks 76th in the world in terms of economic freedom according to the Economic Freedom of the World: 2008 Annual Report, released last week by the Jerusalem Institute for Market Studies (JIMS).
The index published in Economic Freedom of the World measures the degree to which the policies and institutions of countries are supportive of economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to compete, and security of privately owned property. Forty-two variables are used to construct a summary index and to measure the degree of economic freedom in five broad areas: (1) size of government; (2) legal structure and security of property rights; (3) access to sound money; (4) freedom to trade internationally; and (5) regulation of credit, labor and business.
This year's report notes that economic freedom remains on the rise. The average economic freedom score rose from 5.46 (out of 10) in 1980 to 6.65 in the most recent year for which data are available. Of the 102 nations with chain-linked scores going back to 1980, 89 saw an improved score and 13 saw a decrease. In this year’s index, Hong Kong retains the highest rating for economic freedom, 8.94 out of 10, followed by Singapore, New Zealand, Switzerland, United Kingdom, Chile, Canada, United States, Australia, and Ireland.
This is the 12th edition of Economic Freedom of the World and this year's publication ranks 141 nations for 2006, the most recent year for which data are available. JIMS attributes Israel's poor ranking in this year's report to a growing public sector. Israel's scores in key components of economic freedom (ranging from 1 to 10 where a higher value indicates a higher level of economic freedom):
· Size of government: changed to 3.8 from 5.3 in the last year's report
· Legal structures and security of property rights: changed to 6.2 from 6.6
· Access to sound money: changed to 9.1 from 9.3
· Freedom to trade internationally: changed to 7.6 from 7.8
· Regulation of credit, labor and business: changed to 6.4 from 6.7
Israel's rankings were significantly weakened due to Israel's oversized government. One of Israel's lowest ratings (2.1), stable since 1990, was in the rate of government spending as a percentage of total consumption. Israel also loses points due to extremely burdensome tax rates.
