We have, however, constructed this index back to 1970 to aid in the long-term study of economic freedom. There are 125 nations included in this study. 83 i n 1975, and 57 in 1970. Data were assembled for each of the 23 components of the index. Since we wanted the ratings to be easily comparable across countries and time periods, they were placed on a scale from zero to 10.
Higher ratings are indicative of institutions and policies more consistent with economic freedom.
Countries with categorical characteristics more consistent with economic freedom are given higher ratings. For example, countries with few government enterprises are given higher ratings than those with widespread use of such enterprises. Vmax the maximum value for a country during the 1990 base year, and V min the minimum base-year value for the component. This formula is used to derive the ratings for all years. A country s rating will be close to 10 when its value for the component is near the base-year maximum.