Scoring freedoms

Legatum's latest prosperity index is out.

New Zealand ranked 4th overall, beaten by Norway, Denmark and Australia. Personal freedom here is ranked second only to Canada, but the Economic Freedom of the World report has us three places above Canada in economic freedom. Only Singapore and Hong Kong beat New Zealand in the last economic freedom index, but neither of them beat New Zealand in personal freedoms. And so New Zealand, by my ranking, is undominated.

The United States, on the other hand, was 10th in the last economic freedom ranking. Of those ranking higher than the US in economic freedom, Australia, New Zealand, and Canada also dominate on personal freedoms. Maybe Legatum's index isn't the best measure of personal freedom, but it does seem pretty obvious that there are exit options for Americans that do not require trading economic freedom for personal freedom; the US is operating inside the frontier.

Zealand and league tables

A new league table is out placing New Zealand as tied for 9th overall in terms of comparative liveability. The report seems a bit odd though.

• We rank poorly on the competitiveness of our markets, based on a measure of comovement of domestic and international prices. Is that the best measure for small open economies with inflation-targeting banks?
• I have no clue how we score only on par with the US on a measure of economic openness. Check any of the economic freedom indices.
• Our climate is ranked as worse than that of Finland. The measure is meant to be based on population-weighted average maximum and minimum temperatures. For NZ, that means Auckland's subtropical climate is ranked worse than Helsinki. This makes no sense at all, unless the index assumes folks really like cold dark winters.
• Our unemployment rate is always below the US rate, but we fare worse on that measure
• Fraction of survey respondents rating highly "Importance of God in one's life" counts positively in the rankings. Reasonable people could argue that "avoidance of superstition" is a good: atheists don't drown family members in attempted exorcisms. Fun fact: take the countries in the table with scores on both religious freedom and religious belief and run a simple correlation: -0.41. More religious freedom yields less religious belief. Most work I've seen on the topic suggests the opposite: that state monopoly churches discourage belief while competition invigorates it. Checking further, the correlation among Christian countries is 0.01 and that among Islamic countries is -0.57. Hmm.

HT: NBR