The Heritage Foundation a right- wing and influential Washington think-tank has just published its ranking of

The Heritage Foundation, a right- wing and influential Washington think-tank, has just published its ranking of nations according to 10 criteria designed to measure economic freedom. By these tests only eight countries in the world, including the UK, are said to be "free". In order, they are: Hong Kong, Singapore, Bahrain, New Zealand, Switzerland, the US, the UK and Taiwan At the bottom of the table are Cuba, Laos and North Korea. If we accept the economic theory driving this exercise, then we should be encouraged.

The publishers of the "Index of economic freedom" argue that it is a powerful tool to explain why some countries prosper, while others lag behind. The Heritage Foundation claims that there is a significant correlation between economic freedom and the rate of economic growth. It believes that this new theory is a better explanation of economic success, or its absence, than, say, cost advantages, population growth, access to natural resources or the pace of technological change. This leads the authors to claim that any country in the world can become rich if it wants to. If Bangladesh, for instance, immediately started to remove restrictions on its economy, then rather than languishing at No 118 in the table as it does, it could reach the standard of living currently enjoyed by Americans within 40 years.By the same token, however, the Heritage Foundation sees foreign aid in the form of money and nothing else as useless or even harmful. Haiti and Peru have received millions of dollars from the US for 52 years yet they are poorer now than they were in the mid-1960s.

Poverty is largely a condition imposed on people, the authors argue, by ill-conceived and repressive economic policies.But formulae for economic success are like recommendations for healthy living, mostly common sense plus advice about a special diet - and ideas about the latter are always changing. Thus when the Japanese economic miracle was under way in the Sixties, Seventies and Eighties, the mystery ingredient was supposed to be the way the Japanese government guided investment to where it was most needed and got new industries going. At the time, Japan, with its high tariff walls, restrictions on foreign ownership, and licensing systems would have come out badly on the index of economic freedom. Now that Japan's arrangements are more liberal in the Anglo-Saxon sense, the country finds itself stuck in a long period of low growth.The list of the free has some unexpected aspects The UK is the only country of the European Union to feature. The next one down, the Netherlands, comes in at No 9 under the heading "mostly free".