A week or so ago, Newsweek's Julia Baird pointed to my analysis of the connection between national happiness and tolerance. That reminded me and my MPI colleagues of the Heritage Foundation's Economic Freedom Index. The index, which covers 183 countries, is based on ratings for 10 specific factors: business freedom, trade freedom, fiscal freedom, government size, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption, and labor freedom. Hong Kong topped the list overall, followed by Singapore, Australia, New Zealand, Ireland, and Switzerland. Canada came in 7th, the highest among North American nations and slightly ahead of the United States which ranked 8th.
To what extent is economic freedom associated with tolerance and happiness? Are freer nations also more tolerant? Are their residents happier than those of other nations? To what extent is economic freedom also associated with other factors like affluence and material well‑being, the level of human capital, and the transition to postindustrial economic structures? And what is the relationship between freedom and economic inequality?
We decided to take a look. We ran some bivariate correlations and a series of scatter-graphs which I summarize below. Lack of matching data for some of our indicators caused us to leave out African nations from our analysis. As usual, I point out that our analysis points to association between variables only. It does not imply causation, and other factors may complicate the picture. Still, the findings are interesting.