Walter Block and the Economic Freedom of the World Index
John Levendis
In Walter Block — Anarcho-Capitalist Austro-Libertarian, edited by E. Nica and G.H. Popescu, 412–422. Addleton Academic Publishers, 2025.
Why This Research Matters
The Economic Freedom of the World (EFW) Index, developed by Gwartney, Lawson, and Block in 1996, has become one of the most widely used datasets in institutional economics — cited in over 700 scholarly papers. But how compelling is the picture it paints? This chapter uses simple, accessible visualizations of the EFW data to illustrate the relationship between economic freedom and a wide range of social and economic outcomes.
What The Data Shows
Eight scatterplots, each plotting a country’s average EFW score (2000–present) against a different outcome, tell a remarkably consistent story:
Economically free countries are richer. Per capita real GDP rises steeply with EFW scores, with an exponential-looking relationship.
Economically free countries are more equal, not less. Gini coefficients are slightly lower in freer countries — contrary to the common critique that free markets produce inequality.
Economically free countries are healthier. Both maternal and infant mortality fall dramatically with economic freedom.
Economically free countries are cleaner. CO₂ emissions per unit of GDP are lower in freer economies, even controlling for income. More socialist countries pollute more per unit of output.
Economically free countries are less corrupt. The negative correlation between economic freedom and corruption is strong — a result I have also demonstrated in formal econometric work with Hall, Levendis, and Scarcioffolo (2020), controlling for income, education, and other variables.
Literacy and basic sanitation follow the same pattern: higher economic freedom, better outcomes for both men and women.
What This Is and Is Not
This is not a rigorous causal analysis. It is a demonstration of how powerful simple pictures from the EFW data can be. The scatterplots show correlations, not causal effects. But as Hall and Lawson (2014) found in a survey of the scholarly literature, fewer than 4% of studies using the EFW Index find correlations between economic freedom and negative outcomes.
The chapter is also a personal tribute to Walter Block as a colleague and friend during nearly twenty years at Loyola University New Orleans.