"The report measures countries' promotion of "economic freedom"---defined by low taxes, protection of private property, freedom of contract, free trade and monetary stability---on a scale from zero to ten. This year's league table, which ranks 123 countries, uses data from 2002, the latest available. The usual names are at the top. Hong Kong is again reckoned to be the most economically (if not politically) free place on earth, followed by Singapore. America, Britain and New Zealand share third place. Near the bottom are some political as well as economic basket-cases: Venezuela under Hugo Ch�vez, junta-run Myanmar and Robert Mugabe's Zimbabwe. Keen investors in Russia will be chagrined to learn that the country ranks just above Congo-Brazzaville. (North Korea and Cuba are not included, for want of data.)

Economic freedom, argues the report, does much to foster the investment poor countries urgently need if they are to grow. James Gwartney and Robert Lawson, its authors, have found that the freest 20% of countries invest around $11,000 per worker, more than 12 times the figure for the least free 20%.

The effects of economic freedom on coveted foreign direct investment (FDI) are even stronger. The freest fifth of countries attracted over $3,000 of FDI per worker, against $68 for the least free fifth. Moreover, freer countries make better use of what they have: the authors estimate that investment is 70% more productive in the most free countries than in the least free."