It has become apparent in recent years that the issue of vast globalization, economic development and its impact on various aspects of state wellbeing is the one that needs to be looked at very carefully. Moreover, direct investments into the country’s development and as a result improved quality of life are an additional incentive to increase the economic freedom level. Throughout the centuries scholars and economists have argued on whether economic freedom based on private property and free markets is the only beneficial and effective form of economy formation or centralized system of governing is better. Myriad researches have been brought to public, however, our group believes economic freedom is currently in increasing phase of its development, and thus should be thoroughly examined and reviewed basing on country background and scores obtained. This, in our view, will help to accelerate the wellbeing of Kazakhstan and possibly attract additional cash inflows from external market players. The paper will examine the issue of economic freedom and indices it defines in more details, will cover all the aspects included in consideration of the latter concept and will try to assess the relationship between economic freedom and potential investments rise. Brief definition of basic concepts
In order to be in line with the topic and understand it deeply, below we present some underlying definitions of basic concepts that will be used throughout the paper. The classic definition of economic freedom and its index is outlined below: “Individuals have economic freedom when property they acquire without the use of force, fraud, or theft is protected from physical invasions by others and they are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others” James Gwartney and Robert Lawson
Economic Freedom of the World: 1996 Annual Report
As obtained from www.economicfreedom.org, “economic freedom is the key to greater opportunity and an improved quality of life. It’s the freedom to choose how to produce, sell, and use your own resources, while respecting others’ rights to do the same. While a simple concept, economic freedom is an engine that drives prosperity in the world and is the difference between why some societies thrive while others do not.” Considering economic freedom is the issue of highest importance as it deals with each and every aspect of our life. Having greater economic freedom, the society ensures higher income levels, decreased poverty, less unemployment percentages and overall healthier state position in terms of economical, financial and political development. Economic freedom index (EFI) is defined as “a ranking of countries based on the number and intensity of government regulations on wealth-creating activity. Metrics that an economic freedom index evaluates include international trade restrictions, government spending relative to GDP, occupational licensing requirements, private property rights, minimum wage laws and other government-controlled factors that affect people's ability to earn a living and keep what they earn.” (Extracted from www.investopedia.com). For all over the years, The Heritage Foundation in partnership with The Wall Street Journal has tracked the trends in economic freedom around the world and assigned indices to each country. It is a valuable source to gather information from, and the current paper is mostly based on the latter findings. The key factors influencing the level of economic freedom are the personal choice, voluntary exchange coordinated by markets, freedom to enter and compete in markets and protection of individual property from aggression of other including the government intervention. This implies that in economically free society government protects the individuals and their property, maintain stable monetary environment, refrain from creating barriers to trade and fairly allocate...