The Fraser Institute, a
Vancouver-based free-market think tank, has released its annual
report on economic freedom around the world. The Fraser rankings
are among the more useful studies of this kind: While there is, as
always, room for debate about what measurements the institute
should be using and how to properly weigh them, the authors are
sufficiently transparent about their sources to let you draw your
own conclusions and sufficiently consistent to let you track
patterns over time.

The big news for this year — or, technically, the big news for
2010, since that’s when the data come from — is that the United
States, whose place in the rankings has been declining for a while,
has now plunged to number 18. Canada, meanwhile, is tied for number
five. The National Post
explains what happened:

Canada’s economic freedom began to rise under former
prime minister Jean Chrétien, who reined in the budget and reduced
government spending dramatically….Meanwhile, George W. Bush began
to spend — U.S. government consumption went from 17.6% of GDP to
19.5% in 2000, transfers of subsidies went from 13.2% to 16.3% and
the government enterprises and investments went from 17.6% of GDP
to 22.5%.

“Canada really started moving up in economic freedom under a prime
minister that was supposedly from the left side…and the United
States started moving down in economic freedom under someone who
was supposedly from the right wing, Republican party,” said [Fraser
Vice-President Fred] McMahon….Stephen Harper’s Conservatives
expanded the size of government since taking office in 2006, said
[Fraser Institute President Niels] Veldhuis, which pulls the
ranking down a bit.

The report’s top spot went to Hong Kong, which is nominally
ruled by communists these days. The U.S. is wedged between Qatar
and Kuwait.

Bonus reading: Historical context from
David Henderson and Jeet
Heer.

Bonus listening: