The Friedberg Economics Institute works to build awareness in Israel about the consistent and inextricable relationship between economic freedom and economic growth and prosperity.
To this end, the Friedberg Economics Institute seeks avenues to educate the Israeli public – political, business, academic, and opinion leaders, students, and journalists – about the nature and principles of economic freedom and to identify areas in Israeli public policy where application of these principles would improve economic growth and opportunity in Israel
What is economic freedom?
Nobel Prize winning economist Milton Friedman points out that, fundamentally, there are two possible ways the economy of a nation might be organized. “One is central direction involving the use of coercion (government)….The other is voluntary co-operation of individuals – the use of the marketplace.”
The more an economy permits voluntary behavior of individuals, the more it may be considered economically free.
Here is a more technical definition of economic freedom:
Individuals have economic freedom when property they acquire without the use of force, fraud, or theft is protected from physical invasions by others and they are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others.
Why should we care about economic freedom?
There is compelling evidence, through data gathered and analyzed in academic studies, that greater economic freedom in a nation produces a host of highly desirable outcomes: more prosperity, less poverty, improved health, more fairness and justice, and more political freedom.
What is an index of economic freedom?
An index of economic freedom attempts to measure the extent to which economic freedom exists in a given nation – the extent to which rightly acquired property is protected and individuals are free to engage in voluntary transactions.
The two best known measures of economic freedom are Economic Freedom of the World published by the Fraser Institute and the Index of Economic Freedom published by the Heritage Foundation.
Economic Freedom of the World examines five broad areas to measure economic freedom of a given nation: size of government, legal system and property rights, sound money, freedom to trade internationally, and regulation.
Index of Economic Freedom examines four broad areas: rule of law, limited government, regulatory efficiency, and open markets.