Economies of Hong Kong and the Pan-PRD
Economies of Hong Kong and the Pan-PRD
Why the Heritage Foundation ranked Hong Kong as the first “free economy” in the world?
Hong Kong has been ranked the freest economy in the world by the Heritage Foundation for the 19th consecutive year since the index was first published in 1995. We will see the criteria of a free economy according to the Heritage foundation. Then we will explain why and how Hong Kong is ranked as the first free economy in the world.
Criteria of “free economy” according to the Heritage Foundation
Heritage Foundation measures ten components of economic freedom. It assigns a grade for each component using a scale from 0 to 100, where 100 represents the maximum freedom. According to the Heritage Foundation’s website, the 10 economic freedoms are gathered into four pillars of economic freedom:
Rule of Law gathers the property rights and freedom from corruption. * The property rights is the ability of individuals to accumulate private property supervised by the laws of the government. It assesses the way the government applies the laws to protect the property right. It also measures the independence and corruption of the judiciary. * Freedom from corruption evaluates the degree of corruption in economic freedom.
Limited Government brings together the fiscal freedom and the government spending. * The Fiscal freedom assesses the level of tax imposed by the government. It includes taxes on the individuals and the taxes on companies. * The Government spending considers the level of the government expenditures (consumption and transfers) as a percentage of GDP.
Regulatory Efficiency is composed of the business, labor and monetary freedom. * The Business freedom measures the level of freedom in business environment as the ability to start, to operate, and to close a business. * The Labor freedom shows the points of the legal and regulatory structure of a country’s labor market as minimum wages, severance
Why the Heritage Foundation ranked Hong Kong as the first “free economy” in the world?
Hong Kong has been ranked the freest economy in the world by the Heritage Foundation for the 19th consecutive year since the index was first published in 1995. We will see the criteria of a free economy according to the Heritage foundation. Then we will explain why and how Hong Kong is ranked as the first free economy in the world.
Criteria of “free economy” according to the Heritage Foundation
Heritage Foundation measures ten components of economic freedom. It assigns a grade for each component using a scale from 0 to 100, where 100 represents the maximum freedom. According to the Heritage Foundation’s website, the 10 economic freedoms are gathered into four pillars of economic freedom:
Rule of Law gathers the property rights and freedom from corruption. * The property rights is the ability of individuals to accumulate private property supervised by the laws of the government. It assesses the way the government applies the laws to protect the property right. It also measures the independence and corruption of the judiciary. * Freedom from corruption evaluates the degree of corruption in economic freedom.
Limited Government brings together the fiscal freedom and the government spending. * The Fiscal freedom assesses the level of tax imposed by the government. It includes taxes on the individuals and the taxes on companies. * The Government spending considers the level of the government expenditures (consumption and transfers) as a percentage of GDP.
Regulatory Efficiency is composed of the business, labor and monetary freedom. * The Business freedom measures the level of freedom in business environment as the ability to start, to operate, and to close a business. * The Labor freedom shows the points of the legal and regulatory structure of a country’s labor market as minimum wages, severance