Economic Freedom
The Indexes of Economic Freedom are several similar indexes released annually. One is published by The Wall Street Journal and the conservative think-tank Heritage Foundation. A different index is published by the Fraser Institute, and another by the World Economic Forum, their ”Global Competitiveness Report.”
Many peer-reviewed articles have used these indices and all agree that economic freedom is statistically correlated with a higher GDP/Capita, but correlation does not prove causation. ”The Benefits of Economic Freedom: A Survey,” by Niclas Berggren (pdf file here) provides an overview of the research. Most of the studies analyzed by Berggren suggest that economic freedom encourages economic growth.
More economic freedom correlates strongly with higher average income per person, higher income of the poorest 10%, higher life-expectancy, higher literacy, lower infant mortality, higher access to water sources and less corruption. (See “Economic Freedom of the World: 2004 Annual Report” – pdf file here.)
Despite the Heritage Foundation and Wall Street Journal’s laissez-faire economic and fiscal policy ideas, some of their index’s highest-ranking countries, for example Iceland (#5), Denmark (#8), Finland (#12) and Sweden (#19), have some of the world’s most extensive welfare states.