Free Trade Fact of the Day

Conn Carroll / July 14, 2008

The National Center for Policy Analysis‘ Michael Stroup makes an interesting finding when he compare the Fraser Institute’s Economic Freedom Index (EFI) with Freedom House’s political rights index (PRI). The EFI uses objective data to rate a government’s relative level of economic freedom taking into account limited government, stable monetary growth, free trade and a strong rule of law. The PRI, on the other hand, takes into account the right to organize political parties, the significance of the opposition vote, and the possibility for real change in power to make their ratings. Stroup finds:

In countries with comparatively high levels of both economic and political freedom:

• A one-point increase in a country’s EFI score raises women’s life expectancy by 1.2 years.
• A one-point increase in a country’s EFI score raises women’s literacy rate 3.9 percent.
• When compared to males, a one-point increase in a country’s EFI score raises the proportion of female secondary school students by 2.4 percent, but has no significant effect on the labor force ratio.

Unlike the EFI scores, however, changes in PRI scores did not have a significant effect on any of the measures of well-being, with the exception of the female/male secondary school student ratio, where a one-point PRI increase raised the ratio 0.6 percent.

In countries with comparatively low levels of both economic and political freedom:

• A one-point increase in a less-free country’s EFI score raises women’s life expectancy by 1.2 years (the same as in economically and politically freer countries), but an increase in the PRI score has no statistically significant effect.
• A one-point increase in a less-free country’s EFI score has a greater effect on the literacy rate among women than it does in freer countries, increasing women’s literacy 4.25 percent; but again the PRI score is not significant.
• In comparison to males, a one-point increase in a less-free country’s EFI score raises the proportion of female secondary school students by 3.1 percent and the proportion of females in the labor force 1.3 percent.