Libertarians and other free-market advocates agree that protection of private property rights is essential for economic liberty and prosperity. Yet none of the various freedom indices take property rights into account when comparing economic freedom in one country, state, or province to another.
For example, the only measure of property rights in the Fraser Institute’s index of world economic freedom is the “regulatory cost of the sale of real property.” But that doesn’t begin to scratch the surface of property rights. What about the regulatory cost of the use of real property? What about regulatory limits on such use? What about the ease with which government can take property by eminent domain? All of these are much more important than the cost of selling property, yet are ignored by the index.
Last month, the Fraser Institute released its latest index of economic freedom for North America, comparing U.S. and Mexican states and Canadian provinces. Like the world index, this one does not measure property rights. Instead, it focuses on the size of government, taxes, and labor markets. The results are sometimes very different from an index of property rights. Continue reading