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Bolivia’s Economic Freedom at All-Time Low, According to Conservative Think-Tank

Posted: admin on Apr 20 | Business & Economy

Bolivia’s received its lowest-ever economic freedom rating of 49.4 out of 100, according to the Index of Economic Freedom, which classified the country as economically “repressed.” Bolivia ranked 146 out of 179 countries on the 2010 Index, though earning a score just 10 points (out of 100) below the global median. This year’s score represented a large drop from Bolivia’s 68 plus highs in 1998 and 2001.

The Index, compiled by the conservative think-tank The Heritage Foundation and newspaper The Wall Street Journal, evaluates the economic freedom of countries based on 10 forms of economic liberty. Bolivia earned notably high rankings in its fiscal freedom (taxation) and trade freedoms (openness of trade), receiving 76.9 and 84.3 points respectively. The country also received an improved rating of 30.0 in freedom from corruption. The Index graded Bolivia especially low for its investment freedom (15.0 points) and property rights (10.0 points).

At a conference held by the Institute for Democracy at the Catholic University of Bolivia, the Heritage Foundation stressed the link between economic freedom and growth, citing the positive correlation between the Index’s economic freedom rankings and the poverty trends identified by the United Nation’s Human Poverty Index. Many economists criticize the Index of Economic Freedom for its one-sided, pro-free market criteria. Critics note that many countries have experienced growth while earning poor economic freedom rankings, particularly China, which has experienced unprecedented growth with scores commonly lower than Bolivia’s, although Bolivia’s recent descent has dropped the country 2 points below China in 2010. Moreover, some studies have found that growth is closely tied to economic freedom only after a country has reached a medium level of development. For countries with relatively high poverty rates, such as Bolivia, economic freedom and growth are not strongly correlated and often conflict, indicating that economic freedom by no means makes or breaks a country’s economic growth rate.

To Learn More in Spanish:

http://www.bolpress.com/art.php?Cod=2010022507

Or to Learn More about the Index of Economic Freedom:

http://www.heritage.org/index/Country/Bolivia

Or the UN’s Human Development and Human Poverty Index:

http://hdr.undp.org/en/reports/global/hdr2009/

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