Last month the Heritage Foundation
released the 2010 Index of Economic Freedom
. Every year, a similar index is also issued by the Fraser Institute
to compare countries across the globe. These rankings are not without consequences. For example, one criterion used by the recently formed Millennium Challenge Corporation for its Millennium Challenge Account (MCA) is freedom
as estimated by Freedom House
. Similarly, foreign investors rely on these indices to at least screen prospective destinations for their funds. I consider these indices valid in terms of the parameters employed but want to question their reliability to measure freedom across structurally different economies and polities.