Defending (sort of) European Economic Policy

I write frequently about the economic damage caused by European fiscal policy, but today let’s comment on the (comparatively) good policies that exist on the other side of the Atlantic.

We’ll start with this video excerpt from a presentation last month.

If you don’t have time to watch the video, everything you need to know is captured in this data from Economic Freedom of the World. As you can see, European nations (circled in red) dominate the top half.

Indeed, it’s safe the say that Europe dominates the top quartile (the blue nations, categorized as “mostly free”).

As I noted in the video, this does not mean these nations have great policy. Or even good policy.

But it does mean that European nations generally enjoy more economic liberty than countries from other parts of the world (or, if you like looking at the glass as half empty, they suffer from less economic repression).

If you dig into the details, what you will find is that Europeans nations generally have bad fiscal policy, but they tend to score highly in other areas (i.e., good rule of law, low levels of red tape, etc).

To be sure, not all European nations are the same. There’s a big difference between laissez-faire Switzerland and dirigiste Greece, for instance.

But I’ll close be reiterating a comment from the above video, which is that that there’s a much bigger gap between Greece and Venezuela than there is between the United States and Greece.

P.S. A new edition of Economic Freedom of the World has been released, but there were only minor changes for the United States (down one spot) and Europe. And if you look at the latest edition of the Heritage Foundation’s Index of Economic Freedom, the United States is only #25, lagging behind 17 European nations. Including all of the supposedly socialist welfare states in Scandinavia.

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Image credit: Sébastien Bertrand | CC BY 2.0.