This is the Cato Daily Podcast for Wednesday, November 14th, 2007.

I'm Caleb Brown.

In studying the relative economic freedom of nations around the world,

James Guartney says the news is good.

Guardonie, an adjunct scholar at the Cato Institute. James Guartney says the news is good.

Guardney, an adjunct scholar at the Cato Institute,

is co-author of the Economic Freedom of the World Index

released in September.

Well, each year, for one thing, we do a theme chapter, and this year's theme chapter has to do with

whether or not economic freedom as it grows in one country exerts an impact, a spillover effect if you like, on

neighboring countries and not only look at that issue in terms of neighboring

countries geographically but trading partners. And it was that chapter was done by Russ Obel and Pete Leeson.

And Russ is a professor of economics at West Virginia and Pete Leeson is now George Mason.

And essentially their statistical findings

are that as countries in your region become freer,

it does exert some impact on increasing economic freedom or encouraging

neighbors if you like to increase their economic freedom.

And what about trading partners?

Same thing and about equal in terms of magnitude as your trading share goes up by say 10%

exerts with a given country it exerts about the same impact as a 10% increase in economic freedom.

And so it's not, well maybe strong enough, you know, a lot of the foreign policy of the United

States in various periods of time as well as other countries

...