Friedrich-Naumann-Stiftung für die Freiheit - Economic Freedom for states of India

Friedrich-Naumann-Stiftung für die Freiheit - Economic Freedom for states of India [Druckversion]

Economic Freedom for states of India
By Debroy, Bibek; Bhandari, Laveesh

This study deals with the measurement of economic freedom in different states of India. According to Milton Friedman, economic freedom is one part of the concept of 'human freedom'- which is a mix of economic, social and political freedom. This study is limited to measuring economic freedom. While 'economic freedom' is difficult to quantify, such an exercise is easier than concepts of social and political freedom that are more abstract. The term economic freedom has many connotations. Different studies and measures of economic freedom use different definitions of economic freedom.

The Index of Economic Freedom (Heritage Foundation, 2002) defines economic freedom as "the absence of government coercion or constraint on the production, distribution, or consumption of goods and services beyond the extent necessary for citizens to protect and maintain liberty itself'. This Economic Freedom Index for India accepts this definition of freedom, but carries it a little further. While identifying that the government should not interfere in the working of the market, it further requires that the government should fulfill its duty of protecting life and property, and enforcing legal contracts and law. This study is more on the lines of the Economic Freedom of the World (EFW, latest 2003) conducted by the Liberales lnstitut (Liberales Institut, Economic freedom of the World: 2002 Annual Report, The Fraser Institute, Vancouver, Canada.).

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