Table 2.

Economic freedom and indicators

IndicatorsVariablesMeasurements of freer institutions (higher scores)
Size of governmentEF1Lower level of government spending, lower marginal tax rates and less government investment and state ownership of assets
Legal system and property rightsEF2Higher level of independence and impartiality of legal system and property protection
Sound moneyEF3A country follows policies and adopts institutions that lead to low and stable rates of inflation and avoid regulations that limit the ability to use alternative currencies
Freedom to trade internationallyEF4Lower tariffs, easy clearance and efficient administration of customs, a freely convertible currency and few controls on the movement of physical and human capital
RegulationsEF5Less regulatory restraints that limit the freedom of exchange in credit, labor and product markets
Source: Authors’ own elaboration

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