Which Countries Have the Most Economic Freedom?

By the Heritage Foundation, Special for USDR.

For the second consecutive year, economic liberty advanced slightly around the world according to the 2015 Index of Economic Freedom, released today by The Heritage Foundation and The Wall Street Journal.

“No matter the region, per capita income levels are consistently higher in countries that are economically  freer.”

Hong Kong and Singapore finished first and second in the rankings for the 21st consecutive year, but Hong Kong’s lead shrank to only two-tenths of a point. New Zealand moved up two slots to reclaim third place, outperforming Australia (4th) and Switzerland (5th).

The United States stopped a seven-year ratings skid on the strength of modest improvements in six categories, including control of government spending. Despite the improvement, the U.S. economy was still rated as only “mostly free” and remained stuck at 12th in the global rankings.

Seven years ago, the U.S. ranked 5th in the world, one of 30 countries with economies qualifying as “free.” This year, only five economies were rated “free.”

This year, 37 countries, including Taiwan, Israel, Poland and Colombia, logged record high Index scores. Among the 178 countries ranked, scores improved for 101 countries and declined for 73. Ninety economies, or about half of all nations and territories graded in the Index, provide at least a moderate level of economic freedom for their citizens.

Yet 4.5 billion people—about 65 percent of the world’s population—live in economically “unfree” countries. China and India account for more than half of them. Twenty-six countries have “repressed”economies.

“The fundamental relationship between economic freedom and prosperity is readily apparent worldwide,” the editors write. “No matter the region, per capita income levels are consistently higher in countries that are economically freer.”

The Most Free

The Least Free

1. Hong Kong 178. North Korea
2. Singapore 177. Cuba
3. New Zealand 176. Venezuela
4. Australia 175. Zimbabwe
5. Switzerland 174. Eritrea
6. Canada 173. Equatorial Guinea
7. Chile 172. Turkmenistan
8. Estonia 171. Iran
9. Ireland 170. Rep. of Congo
10. Mauritius 169. Argentina

Launched in 1995, the Index evaluates countries in four broad policy areas that affect economic freedom: rule of law; limited government; regulatory efficiency; and open markets. There are 10 specific categories: property rights, freedom from corruption, fiscal freedom, government spending, business freedom, labor freedom, monetary freedom, trade freedom, investment freedom, and financial freedom. Scores in these categories are averaged to create an overall score.

The 2015 Index was edited by Ambassador Terry Miller, director of The Heritage Foundation’s Center for Trade and Economics (CTE) and Center for Data Analysis; and Anthony B. Kim, a CTE senior policy analyst. Copies of the Index (492 pages, $24.95) may be ordered online at www.heritage.org/index or by calling 1-800-975-8625. The full text, including charts and graphs, also is available online.

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.
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