In the decades since The Heritage Foundation began publishing its annual Index of Economic Freedom in 1995, the world has witnessed profound advances in economic freedom.
Open economies have led the world in a startling burst of innovation and economic growth, and political authorities have found themselves increasingly held accountable by those they govern.
Unfortunately, the United States has drifted downward in the index rankings—propelled by reckless government spending that has spiraled out of control and led to unprecedented budget deficits. The long U.S. slide has been marked by stagnant economic expansion and extremely sluggish employment growth.
So, in this important election year, The Heritage Foundation has dedicated its annual “Global Agenda for Economic Freedom” to a detailed examination of ways to improve Americans’ economic freedom and America’s positive impact on the global economy.
Here are 12 steps the next U.S. president can take in 2017 for more economic freedom in America and the rest of the world:
- American workers and consumers have benefitted from international trade, but global barriers to the free flow of goods and services and investment (e.g. nontariff barriers and nontransparent investment regimes) grew under President Barack Obama. The next administration must promote economic freedom by reducing them and opening new markets.
- China faces huge economic challenges that, if unaddressed, will drag down the global economy. As a start, the next U.S. president should push China’s leadership to sign a bilateral investment agreement to make doing business there easier.
- The price and availability of one of the most important production inputs—energy—will benefit from further liberalization of American and global energy markets.
- Export financing subsidies from the U.S. Export-Import Bank and elsewhere are unnecessary and distort the U.S. and global economies. The Export-Import Bank should be shut down.
- American economic growth will be enhanced by better, U.S.-led international policy coordination. The next president should downgrade the ineffective G-20 process and create a new, informal G-9 group of the world’s top nine economies.
- The International Monetary Fund was created to bring stability to the international financial system. The IMF must return to basics by promoting rules-based monetary policies instead of bailing out countries that fail to follow those rules.
- Many countries’ economic freedom scores would be substantially higher if not for the prevalence of government corruption. The next administration should make the fight against corruption a key component of U.S. development assistance programs.
- The next president should evaluate all foreign aid programs for effectiveness and insist Congress update the 1961 Foreign Assistance Act to put the United States Agency for International Development directly under State Department control.
- Massively subsidized state-owned enterprises are a main factor restraining development. The next president should review U.S. state-owned enterprises, remove the U.S. government from activities best left to the private sector, and push other countries to do likewise.
- The next president must confront rogue states pursuing deliberately harmful policies that threaten global security and commerce by creating a sanctions strategy that targets troublemakers and prioritizes reforms that enhance economic freedom.
- Climate change policies are another area where government decisions have created opportunities for rent-seeking cronyism and have harmed economic growth while doing nothing that actually affects global temperatures. The next administration should take immediate action to withdraw from the redistributionist and ineffective United Nations Framework Convention on Climate Change and end U.S. payments to the U.N. Green Climate Fund.
- Government-sponsored corporate socialist cronyism, often under the guise of promoting corporate social responsibility, increased greatly under Obama. The next president must assess the risks of cronyism-related CSR rent-seeking and end federal “corporate excellence” awards, “green” tax credits, “public-private partnerships,” and all other forms of corporate welfare.
The revitalizing policies in the “2017 Global Agenda for Economic Freedom” will create good, new jobs for Americans and a freer flow of capital, goods, services, and ideas around the world.
James M. Roberts is the Research Fellow in Freedom and Growth at The Heritage Foundation's Center for International Trade and Economics. Roberts' primary responsibility is to produce the Index of Economic Freedom, an influential annual analysis of the economic climate of countries throughout the world.
William T. Wilson is a senior research fellow in The Heritage Foundation’s Asian Studies Center. He concentrates on analyzing the economic performance of Asian-Pacific nations and educating Asian leaders in the principles and practices of free markets.
Editor's Note: This piece was originally published by The Daily Signal.