1. Martin Krause Professor of Economics ESEADE Graduate School and University of Buenos Aires

2. Where possession has no stability, there must be perpetual war. Where property is not transferred by consent, there can be no commerce. Where promises are not observed, there can be no leagues nor alliances David Hume (1711-1776)

3.  Competition between monopolies  The Tiebout effect  Exit & voice  Competition fuels evolution ◦ Reason brings variation ◦ Evolution brings selection

4.  “Race to the bottom”  Competitive actions are negative externalities for other governments  Harmonization

5.  Rule of Law, World Bank  Voice & Accountability, World Bank  Perception of Corruption, Transparency International  Freedom of the press, Freedom House  Doing Business, World Bank  Global Competitiveness, World Economic Forum  Economic Freedom of the World, Fraser Institute  Economic Freedom, Wall Street Journal/Heritage Foundation

6. RankCountryRank 2008Rank 2007 1Denmark12 2Switzerland61 3New Zealand24 4Finland33 5Iceland45 6Canada911 7Ireland1012 8Netherlands89 9United States168 10United Kingdom1410 11Australia1113 12Andorra-- 13Sweden76 14Norway514 15Luxemburg157 16Germany1215 17Liechtenstein-- 18Austria17 19Belgium1316 20Hong Kong2720

7. RankCountry Position 2008 Position 2007 172 Belarus169172 173 Guinea-Bissau158159 174 Venezuela174161 175 Congo, Republic167166 176 Guinea179160 177 Laos181168 178 Uzbekistan186177 179 Angola178171 180 Burundi168173 181 Iraq180176 182 Afghanistan182164 183 Eritrea176162 184 Sudan184180 185 Equatorial Guinea187175 186 Congo, Democratic Republic188182 187 Chad185178 188 Zimbabwe183179 189 Turkmenistan189181 190Korea, North190183 191 Myanmar192184

8. Continents  Europe (0,73)  Oceania (0,65)  America (0,57)  Asia (0,40)  Africa (0,31) Political division  North America(0.93)  Western Europe(0,88)  Latin America (0,45) Central America (0,51) Non-latin Caribbean countries (0,75)  Middle East (0,41)  Former socialists countries in Europe (0,58)

9. Country20092007Positions won Albania9413440 Bahrein577417 Georgia759116 St. Kitts & Nevis324715 Saudi Arabia8810214 Dominican Republic10211412 Qatar617211 Tanzania10811911 Rwanda15916910

10. Country20092007Positions lost Malawi141115-26 Argentina11493-21 Nicaragua11695-21 Eritrea183162-21 Belize7656-20 Guyana130111-19 Afghanistan182164-18 Senegal123105-18 Iran167149-18 Moldova127110-17 Guinea176160-16 Bolivia133118-15

11. Europe: Denmark, Finland, Iceland, Norway and Switzerland America: Canada and US, but then Bahamas, Barbados, St. Lucia and Chile Africa: Mauricio, South Africa and Botswana. Oceania: New Zealand Asia: Japan, Hong Kong and Taiwán US and Canada in America NZ and Australia in Oceania Northern countries in Europe Non-latin Caribean countries compared to Latin America

12. AsiaPosition HONG KONG0.88241 JAPAN0.87002 SINGAPORE0.80653 TAIWAN0.78704 KOREA, SOUTH0.77295 MAURITIUS0.75566 ISRAEL0.72867 KUWAIT0.65008 BAHRAIN0.64609 QATAR0.631510 UNITED ARAB EMIRATES0.614811 MALAYSIA0.613012 OMAN0.596813 THAILAND0.586414 JORDAN0.547215 MONGOLIA0.527616 SAUDI ARABIA0.523217 SEYCHELLES0.507518 INDIA0.495519 ARMENIA0.473120 BRUNEI0.466021 BHUTAN0.455022 PAPUA NUEW GUINEA0.445023 LEBANON0.414224 MALDIVES0.400325 SRI LANKA0.396126 KAZAKHSTAN0.391927 PHILIPPINES0.387528 CHINA0.378729 MOLDOVA0.364130 INDONESIA0.356931 KYRGYZSTAN0.312632 AZERBAIJAN0.310533 PAKISTAN0.299734 VIETNAM0.280335 NEPAL0.254236 TIMOR-LESTE0.236037 CAMBODIA0.232038 YEMEN0.231539 BANGLADESH0.228340 SYRIA0.197841 TAJIKISTAN0.189142 IRAN0.184443 LAOS0.121544 UZBEKISTAN0.120145 IRAQ0.102346 AFGHANISTAN0.098147 TURKMENISTAN0.045348 KOREA, NORTH0.043449 MYANMAR0.023550

13. CountryIQIPosition in Asia Position in the world SINGAPORE0.80653 26 MALAYSIA0.613012 65 THAILAND0.586414 73 BRUNEI0.431922 103 PAPUA NUEW GUINEA0.466023 107 PHILIPPINES0.387527 115 INDONESIA0.356930 128 VIETNAM0.280334 144 TIMOR-LESTE0.236036 152 CAMBODIA0.232037 154 LAOS0.121543 177 MYANMAR0.023549 191

14. CountryTransparencyVoice & AccRule of Law Freedom press Global competitiveness Doing BusinessFraserHeritage Afghanistan0.02780.14350.00950.20000.1099 Armenia0.40000.30140.40950.26670.28360.76370.53190.8280 Azerbaijan0.12780.15310.24760.14360.49250.82420.17020.3248 Bahrain0.76110.24880.69520.19490.73130.90660.74470.8854 Bangladesh0.18330.28710.25240.23080.17910.39560.24110.0573 Bhutan0.75560.23440.63810.32820.3187 Brunei0.17220.59520.15900.71640.5165 Cambodia0.06670.23920.14760.34870.19400.25820.3694 China0.58330.06220.42860.07690.78360.54400.34750.2038 Hong Kong0.93330.65550.90480.65640.92540.98351.0000 India0.50000.59330.56190.61030.63430.32970.46100.2739 Indonesia0.30560.43060.27620.41540.59700.29120.29080.2484 Iran0.21110.08610.23330.05640.21980.43970.0446 Iraq0.01670.10050.01430.21540.1648 Israel0.82220.71770.73330.69740.83580.84070.46810.7134 Japan0.90000.75600.90000.81030.94030.93960.81560.8981 Jordan0.72780.28230.64760.30770.64930.44510.68090.6369 Kazakhstan0.20000.18660.24760.13330.51490.62090.70920.5223 Korea, North0.00480.15710.00510.0064 Korea, South0.78330.67460.74760.64100.91040.87910.80140.7452 Kuwait0.64440.33490.71430.41030.74630.71980.87230.7580 Kyrgyzstan0.06110.28230.09520.20510.09700.63190.56740.5605 Laos0.16670.06700.18100.08720.09340.1338 Lebanon0.43330.34450.30480.40510.45600.5414

15. CountryTransparency Voice & Acc Rule of Law Freedom press Global competitiv eness Doing BusinessFraserHeritage Malaysia0.74440.31100.65240.27180.85070.89560.49650.6815 Maldives0.36110.22010.54290.25130.6264 Mauritius0.77780.73210.74290.72820.58210.87360.71630.8917 Moldova0.37220.36360.30480.24620.29850.43410.45390.4395 Mongolia0.40560.52150.44760.58460.26120.68680.70210.6115 Myanmar0.01110.00960.05710.01030.02130.0318 Nepal0.31110.22970.31900.37950.06720.33520.09930.2930 Oman0.77220.19620.72380.18970.72390.69230.73760.7389 Pakistan0.25560.19140.19520.24100.25370.57690.26950.4140 Philippines0.20560.43060.34290.50260.47760.23080.48940.4204 Qatar0.84440.28230.80000.29230.81340.80220.5860 Saudi Arabia0.55000.07660.58570.10260.80600.91760.6242 Seychelles0.70000.46890.58100.35900.4286 Singapore0.98330.34930.95240.21030.97011.00000.99290.9936 Sri Lanka0.48330.35410.55710.23590.43280.27660.4331 Syria0.18890.05260.37620.08210.42540.24730.12060.0892 Taiwan0.78890.69380.70480.83080.88060.67030.87940.8471 Tajikistan0.15000.11480.11430.13850.14180.12640.44680.2803 Thailand0.54440.29670.52860.38460.75370.93410.6624 Timor-Leste0.19440.44020.08100.58970.04480.0659 Turkmenistan0.07780.01910.07620.01540.0382 United Arab Emirates0.81110.22970.69520.22560.77610.75270.82270.6051 Uzbekistan0.08330.03350.14760.03590.24180.1783 Viet Nam0.32780.07180.39050.09230.48510.49450.23400.1465 Yemen0.22220.18660.19050.11790.46150.2102

16. “The process of enlargement of options for people and the welfare they achieve are at the heart of the concept of human development. Those options are neither finite nor static. Nevertheless, the three esential options for people are: living and extended and healthy life, getting knowledge and having access to those resources needed to have a decent life. But human development does not stop there. Other options, to which many people asign great value, go from political, economic and social freedom to opportunities to have a creative and productive life and enjoy self-respect and protection of human rights.

17.  Life expectations at birth (25-85 years)  Rate of adult literacy and gross rate of admission to primary, secondary and tertiary education (0 and 100%)  per capita GDP (100 and 40.000 dollars)

18. Position HDICountryValuePosition IQI 1Iceland0,9684 1Norway0,9685 3Australia0,96211 4Canada0,9619 5Ireland0,95910 6Sweden0,9567 7Switzerland0,9556 8Japan0,95320 8Netherlands0,9538 10France0,95219 10Finland0,9523 12United States0,95116 13Spain0,94928 13Denmark0,9491 15Austria0,94817 16United Kingdom0,94614 16Belgium0,94613 18Luxemburg0,94415 19New Zeland0,9432 20Italy0,94148

19. Asia Position General position CountryValue 18Japan0.956 222Hong Kong0.942 324Israel0.930 425Korea0.928 527Brunei0.919 628Singapore0.918 729Kuwait0.912 831United Arab Emirates0.903 932Bahrein0.902 1034Qatar0.899 1153Oman0.839 1254Seychelles0.836 1355Saudi Arabia0.835 1463Malasya0.823 1571Kazakhstan0.807 1674Mauritius0.802 1778Lebanon0.796 1881Thailand0.786 1983Armenia0.777 2084Iran0.777 2190Jordan0.769 2294China0.762 2397Azerbaijan0.758 2499Maldives0.749 25102Philippines0.745 26104Sri Lanka0.742 27108Turkmenistan0.728 28109Indonesia0.726 29114Vietnam0.718 30131Bhutan0.613 31132India0.612 32133Laos0.608 33135Myanmar0.585 34136Cambodia0.575 35139Pakistan0.562 36147Bangladesh0.524 37149Papua New Guinea0.516

20. Countries with better positions at IQI show a better trend at HDI For example:  Since 1980 Brunei improved its HDI by 0.092 points, Singapore 0.134, Israel 0.103, Kuwait and UAE 0.100, Bahrein 0.132, Malaysia 0.158, Thailand 0.142  Myanmar did it by 0.096 points, Laos by 0.088 (since 1995)