New Report – The United States’ Sharp Drop in Economic Freedom Since 2000 Driven by ‘Decline in Rule of Law’

The increased use of eminent domain to transfer property to powerful political interests, the ramifications of the wars on terrorism and drugs, and the violation of the property rights of bondholders in the auto-bailout case have weakened the tradition of strong adherence to the rule of law in United States. We believe these factors have contributed to the sharp decline in the rating for the legal-system area.
To a large degree, the United States has experienced a significant move away from rule of law and toward a highly regulated, politicized, and heavily policed state.
– From the Cato/Fraser Institute’s recent report: Economic Freedom of the World in 2012
Every year, Cato and Canada’s Fraser Institute publish a report titled Economic Freedom of the World (EFW), in which they rank countries across the globe based on their economic freedom. The latest report was just released and it covers 2012 data for 152 countries. The methodology for the index is based on five major areas in which the countries are ranked. These are are listed below along with a brief summary:
1) Size of Government The four components of Area 1 indicate the extent to which countries rely on the political process to allocate resources and goods and services. When government spending increases relative to spending by individuals, households, and businesses, government decision-making is substituted for personal choice and economic freedom is reduced.
2) Legal System and Property Rights Protection of persons and their rightfully acquired property is a central element of economic freedom and a civil society. Indeed, it is the most important function of government. Area 2 focuses on this issue. The key ingredients of a legal system consistent with economic freedom are rule of law, security of property rights, an independent and unbiased judiciary, and impartial and effective enforcement of the law.
Countries with major deficiencies in this area are unlikely to prosper regardless of their policies in the other four areas.
Remember that line for later, it is extremely important.

This post was published at Liberty Blitzkrieg on Oct 13, 2014.