I will focus on the 2007 IEF report (<http://www.heritage.org/research/ features/index/downloads.cfm>), which was released on Jan. 16. It ranked 157 countries according to 10 specific factors: Business Freedom, Trade Freedom, Fiscal Freedom, Monetary Freedom, Investment Freedom, Financial Freedom, Property Rights, Labor Freedom, Freedom from Government and Freedom from Corruption. Each factor was graded from 0 to 100, and the scores for the 10 factors were averaged to get the overall IEF for each country. The closer is the IEF to 100, the less the government interference in the economy. According to the empirical evidence presented in the report, countries with greater levels of economic freedom have on the whole achieved faster rates of economic growth and have higher levels of per capita income. The IEF report began to rank countries 13 years ago. Both the factors and the methodology in constructing the IEF have changed over the years. The data used in compiling the IEF come from different sources; e.g., data on "business freedom" come from the World Bank's annual "Doing Business" survey intended to represent entrepreneurial freedom. Although most of the data in the 2007 IEF report covered the second half of 2005 and the first half of 2006, some factors, such as Monetary Freedom were measured using historical data covering several years to take account of trends.
The global IEF in 2007 was 60.6, slightly down from last year, but still the second highest since 1995. In each of the five major regions, the IEF has risen during the last decade, with Europe recording the fastest increase and showing the highest levels among all regions, at 67.5 in 2007.
The report classifies countries into five groups according to their IEF scores: Free (80-100) with 7 countries, Mostly Free (70-79.9) with 23 countries, Moderately Free (60-69.9) with 48 countries, Mostly Un-free (50-59.9) with 59 countries, and Repressed (0-49.9) with 20 countries. The top 10-ranked countries (with their total scores) were: Hong Kong (89.3), Singapore (85.7), Australia (82.7), United States (82), New Zealand (81.6), United Kingdom (81.6), Ireland (81.3), Luxembourg (79.3), Switzerland (79.1) and Canada (78.7). Turkey, with a total score of 59.9, was ranked the 83rd economically freest country among 157 countries. According to the chart below, Turkey's Labor Freedom score, among the lowest 20 scores in the world, due to rigid employment regulations, was relatively the lowest among all the 10 scores.
According to the data in the table below, compiled from the earlier IEF reports, although Turkey's IEF has risen during the last three years, it has not shown any significant increase during the last 13 years.
For the world as a whole, however, across all the five major regions, IEF has shown an increase during the last decade. Furthermore, against other countries in Europe, Turkey's IEF ranking has deteriorated during 1995-2007, dropping to 34th place among 41 countries in 2007 from 12th place among 24 countries, in 1995. This raises serious questions about the Turkey's ability to create new businesses with either national or foreign capital and to encourage existing nationally and foreign-owned businesses to expand their operations.
| Year | Turkey's IEF |
| 1995 | 61.3 |
| 1996 | 59.8 |
| 1997 | 63.8 |
| 1998 | 64.2 |
| 1999 | 63.2 |
| 2000 | 66.2 |
| 2001 | 63.4 |
| 2002 | 53 |
| 2003 | 50.9 |
| 2004 | 51.7 |
| 2005 | 50.3 |
| 2006 | 58.5 |
| 2007 | 59.3 |
| Source: |
| http://www.heritage.org/research/features/index/index.cfm |
