Israel ranks 81st in study measuring economic freedom

Annual report lists Hong Kong as country with most economic freedom; Israel falls on list do to large government and conscription army.

September 20, 2010 10:13
1 minute read.
The Jerusalem Post

Money 311. (photo credit: Bloomberg)


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Israel ranked 81st out of 141 countries in a study measuring economic freedom released by the Jerusalem Institute for Market Studies (JIMS) on Monday.

The countries with the highest level of economic freedom according to the report were Hong Kong, Singapore, New Zealand, Switzerland, Chile and the United States.

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For the first time in 25 years, the level of global economic freedom decreased , mostly due to government policies aimed at easing the financial crisis, according to the report.

The Jewish State ranked 78th in the Economic Freedom of the World: Annual report last year.

Economic freedom is measured in five different areas: size of government, legal structure and protection of property rights, access to sound money, freedom to trade internationally, and regulation of credit, labor and business.

The area in which Israel is least free, for which it received a score of 5 out of 10, is the size of government. Israel received its best scores for access to sound money  and freedom to trade internationally. High import taxes for cars and other goods, and the small size of the trade sector prevented it from getting an even higher score.

Israel's security problems damaged its economic freedom not only because of the large defense budget. Israel received a score of 0 for its policy of conscription (an all-volunteer military would have moved Israel up 5 places in the ranking), and a score of 4.2 for military intervention in rule of law and the political process.

"Israel has made much progress since the report was first published in 1980," said Corinne Sauer, Executive Director of JIMS, "but in the past decade, in spite of some positive reforms, other countries are progressing faster toward promoting economic freedom. In order to deal with the challenges we will face in the coming decade, Israel must continue to develop its economic prowess. There is no better way to achieve this than to advance additional reforms which promote economic freedom."

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