Index of Economic Freedom
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The ''Index of Economic Freedom'' is an annual index and ranking created in 1995 by
The Heritage Foundation The Heritage Foundation (or simply Heritage) is an American Conservatism in the United States, conservative think tank based in Washington, D.C. Founded in 1973, it took a leading role in the conservative movement in the 1980s during the Presi ...
and ''
The Wall Street Journal ''The Wall Street Journal'' (''WSJ''), also referred to simply as the ''Journal,'' is an American newspaper based in New York City. The newspaper provides extensive coverage of news, especially business and finance. It operates on a subscriptio ...
'' to measure the degree of economic freedom in the world's nations. The creators of the index assert that they take an approach inspired by
Adam Smith Adam Smith (baptised 1723 – 17 July 1790) was a Scottish economist and philosopher who was a pioneer in the field of political economy and key figure during the Scottish Enlightenment. Seen by some as the "father of economics"——— or ...
's ''
The Wealth of Nations ''An Inquiry into the Nature and Causes of the Wealth of Nations'', usually referred to by its shortened title ''The Wealth of Nations'', is a book by the Scottish people, Scottish economist and moral philosophy, moral philosopher Adam Smith; ...
'', that "basic institutions that protect the liberty of individuals to pursue their own economic interests result in greater prosperity for the larger society".


Purpose

The Heritage Foundation The Heritage Foundation (or simply Heritage) is an American Conservatism in the United States, conservative think tank based in Washington, D.C. Founded in 1973, it took a leading role in the conservative movement in the 1980s during the Presi ...
's ''Index of Economic Freedom'' states that, "Economic freedom is the fundamental right of every human to control his or her own labor and property. In an economically free society, individuals are free to work, produce, consume, and invest in any way they please. In economically free societies, governments allow labor, capital, and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself." By publishing the ''Index'' annually, the foundation attempts to highlight where such freedoms do and do not exist. The Heritage Foundation reports that the top 20% on the ''Index'' have twice the per capita income of those in the second quintile, and five times that of the bottom 20%. Carl Schramm, who wrote the first chapter of the 2008 ''Index'', states that cities of
Medieval Italy The history of Italy in the Middle Ages can be roughly defined as the time between the collapse of the Western Roman Empire and the Italian Renaissance. Late antiquity in Italy lingered on into the 7th century under the Ostrogothic Kingdom and ...
and those of the mid-19th century
Midwestern United States The Midwestern United States (also referred to as the Midwest, the Heartland or the American Midwest) is one of the four census regions defined by the United States Census Bureau. It occupies the northern central part of the United States. It ...
both flourished proportionate to their possessed economic fluidity and institutional adaptiveness created by economic freedom. According to Will Wilkinson of the
libertarian Libertarianism (from ; or from ) is a political philosophy that holds freedom, personal sovereignty, and liberty as primary values. Many libertarians believe that the concept of freedom is in accord with the Non-Aggression Principle, according ...
think tank A think tank, or public policy institute, is a research institute that performs research and advocacy concerning topics such as social policy, political strategy, economics, military, technology, and culture. Most think tanks are non-governme ...
Cato Institute The Cato Institute is an American libertarian think tank headquartered in Washington, D.C. It was founded in 1977 by Ed Crane, Murray Rothbard, and Charles Koch, chairman of the board and chief executive officer of Koch Industries.Koch ...
, studies show that higher economic freedom correlates strongly with higher self-reported happiness. According to economists Tomi Ovaska and Ryo Takashima, economic freedom research suggests "that people unmistakably care about the degree to which the society where they live provides them opportunities and the freedom to undertake new projects, and make choices based on one's personal preferences." According to the Cato Institute, higher economic freedom promotes participation and collaboration. Also claimed is that higher economic freedom is extremely significant in preventing wars; according to their calculations, freedom is around 54 times more effective than democracy (as measured by ''Democracy Score'') in diminishing violent conflict.


Ratings

Between 1995, the first edition of the ''Index'', and 2008, the score for world economic freedom has increased, rising 2.6 points, according to the ''Index''. Between 2008 and 2011, however, the score decreased 60.2 to 59.7, though the 2011 score represents an increase of 2.2 points since the first edition in 1995. The economic freedom score improved for 117 countries, the majority of countries included in the index, which were mainly developing and
emerging market An emerging market (or an emerging country or an emerging economy) is a market that has some characteristics of a developed market, but does not fully meet its standards. This includes markets that may become developed markets in the future or we ...
economies. In 2011, with the exception of
Europe Europe is a continent located entirely in the Northern Hemisphere and mostly in the Eastern Hemisphere. It is bordered by the Arctic Ocean to the north, the Atlantic Ocean to the west, the Mediterranean Sea to the south, and Asia to the east ...
and
North America North America is a continent in the Northern Hemisphere, Northern and Western Hemisphere, Western hemispheres. North America is bordered to the north by the Arctic Ocean, to the east by the Atlantic Ocean, to the southeast by South Ameri ...
, there were increased levels of freedom recorded in all regions, with the greatest improvement shown in
Sub-Saharan Africa Sub-Saharan Africa is the area and regions of the continent of Africa that lie south of the Sahara. These include Central Africa, East Africa, Southern Africa, and West Africa. Geopolitically, in addition to the list of sovereign states and ...
. The top five "free" economies identified by the 2011 index were
Hong Kong Hong Kong)., Legally Hong Kong, China in international treaties and organizations. is a special administrative region of China. With 7.5 million residents in a territory, Hong Kong is the fourth most densely populated region in the wor ...
,
Singapore Singapore, officially the Republic of Singapore, is an island country and city-state in Southeast Asia. The country's territory comprises one main island, 63 satellite islands and islets, and one outlying islet. It is about one degree ...
,
Australia Australia, officially the Commonwealth of Australia, is a country comprising mainland Australia, the mainland of the Australia (continent), Australian continent, the island of Tasmania and list of islands of Australia, numerous smaller isl ...
,
New Zealand New Zealand () is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and List of islands of New Zealand, over 600 smaller islands. It is the List of isla ...
, and
Switzerland Switzerland, officially the Swiss Confederation, is a landlocked country located in west-central Europe. It is bordered by Italy to the south, France to the west, Germany to the north, and Austria and Liechtenstein to the east. Switzerland ...
, each scoring over 80 on the economic freedom grading scale. Also in 2011, the
United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
dropped to 9th place in the ''Index'', falling behind
Denmark Denmark is a Nordic countries, Nordic country in Northern Europe. It is the metropole and most populous constituent of the Kingdom of Denmark,, . also known as the Danish Realm, a constitutionally unitary state that includes the Autonomous a ...
,
Canada Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, making it the world's List of coun ...
, and first-place
Hong Kong Hong Kong)., Legally Hong Kong, China in international treaties and organizations. is a special administrative region of China. With 7.5 million residents in a territory, Hong Kong is the fourth most densely populated region in the wor ...
, which ranked first in every issue of the ''Index'' from 1995 until 2019. The Heritage Foundation pointed to increases in government spending as a primary reason for the United States' decline in its ranking. According to data from the 2011 ''Index'', the growth rates of countries with the highest levels of government spending were 4.5 points lower, on average, than countries where government spending was under control. In their "Executive Highlights" of index results in 2011, the Heritage Foundation wrote that, "high levels of government spending in response to the global economic turmoil have not resulted in higher economic growth". In 2012, results from the ''Index'' showed an overall decline in global economic freedom; according to The Heritage Foundation, the average score in its ranking was the second- lowest of the last ten years. The U.S. dropped to 10th place in the 2012 ranking, falling three places since 2008, when it was seventh. A report issued by the Heritage Foundation stated that government spending was the cause of many countries' declines, and that the spending had "not only failed to arrest the economic crisis, but also – in many countries – seems to be prolonging it". According to the report, activity in the private sector is threatened by the greater government spending, which has increased public debt and led to more bureaucracy.


Hong Kong

For 25 consecutive years, from 1995 to 2019,
Hong Kong Hong Kong)., Legally Hong Kong, China in international treaties and organizations. is a special administrative region of China. With 7.5 million residents in a territory, Hong Kong is the fourth most densely populated region in the wor ...
was ranked the world's most free economy by the ''Index''. In 2019, however, after the Hong Kong national security law was implemented, the Heritage Foundation dropped Hong Kong and Macau as independent entities in the ''Index'', writing that, "developments in recent years have demonstrated unambiguously that those policies are ultimately controlled from
Beijing Beijing, Chinese postal romanization, previously romanized as Peking, is the capital city of China. With more than 22 million residents, it is the world's List of national capitals by population, most populous national capital city as well as ...
". The 2019 ''Index'' ranked the level of economic freedom in
China China, officially the People's Republic of China (PRC), is a country in East Asia. With population of China, a population exceeding 1.4 billion, it is the list of countries by population (United Nations), second-most populous country after ...
low, 107th among the 178 ranked in the report.


Methodology

The ''Index'' evaluates 184 countries in four broad policy areas that affect the economic freedom, which are rule of law, government size, regulatory efficiency, and open markets. It also takes into consideration some specific categories like property rights, judicial effectiveness, government integrity and tax burden. The ranking scores aspects of economic freedom between 0 and 100, with 0 meaning "no economic freedom" and 100 meaning "total economic freedom". There are twelve aspects divided into four categories.


Reception

In 2001,
Freedom House Freedom House is a nonprofit organization based in Washington, D.C. It is best known for political advocacy surrounding issues of democracy, Freedom (political), political freedom, and human rights. Freedom House was founded in October 1941, wi ...
, a human rights group, wrote that, "there is a high and statistically significant correlation between the level of political freedom as measured by Freedom House and economic freedom as measured by ''The Wall Street Journal''/Heritage Foundation survey." In his 2005 book ''
The End of Poverty ''The End of Poverty: Economic Possibilities for Our Time'' () is a 2005 book by American economist Jeffrey Sachs. It was a ''New York Times'' bestseller. In the book, Sachs argues that extreme poverty—defined by the World Bank as incomes of ...
'',
Jeffrey Sachs Jeffrey David Sachs ( ; born November 5, 1954) is an American economist and public policy analyst who is a professor at Columbia University, where he was formerly director of The Earth Institute. He worked on the topics of sustainable develop ...
graphed countries' ratings on the ''Index'' against per capita GDP growth between 1995 and 2003, claiming to demonstrate that there was no correlation between a country's rating and its rate of economic growth. As examples, Sachs cited countries with good ratings in the ''Index'', such as
Switzerland Switzerland, officially the Swiss Confederation, is a landlocked country located in west-central Europe. It is bordered by Italy to the south, France to the west, Germany to the north, and Austria and Liechtenstein to the east. Switzerland ...
and
Uruguay Uruguay, officially the Oriental Republic of Uruguay, is a country in South America. It shares borders with Argentina to its west and southwest and Brazil to its north and northeast, while bordering the Río de la Plata to the south and the A ...
, which had sluggish economic performances while others, like
China China, officially the People's Republic of China (PRC), is a country in East Asia. With population of China, a population exceeding 1.4 billion, it is the list of countries by population (United Nations), second-most populous country after ...
, with poorer ratings in the ''Index'' were experiencing strong economic growth. In January 2005, Stefan Karlsson of the
Ludwig von Mises Institute The Ludwig von Mises Institute for Austrian Economics, or Mises Institute, is a nonprofit think tank headquartered in Auburn, Alabama, that is a center for Austrian economics, right-wing libertarian thought and the paleolibertarian and anarcho ...
challenged the usefulness of the ''Index'' due to the fuzziness of many of the categories used to determine freedom. In March 2005, John Miller criticized the ''Index'', writing in ''
Dollars & Sense ''Dollars & Sense'' is a magazine focusing on economics from a progressive perspective, published by Dollars & Sense, Inc, which also publishes textbooks in the same genre. ''Dollars & Sense'' describes itself as publishing "economic news and an ...
'', "In the hands of the Wall Street Journal and the Heritage Foundation, Washington's foremost right-wing think tank, however, an economic freedom index merely measures corporate and entrepreneurial freedom from accountability. Upon examination, the index turns out to be a poor barometer of either freedom more broadly construed or of prosperity." According to Left Business Observer, growth in Index accounts for 10% of the variation in the growth of GDP. In September 2007, the Millennium Challenge Account, a U.S. government foreign aid program, used the ''Index'' in determining which countries will receive their performance-based compacts. In January 2008,
United Arab Emirates The United Arab Emirates (UAE), or simply the Emirates, is a country in West Asia, in the Middle East, at the eastern end of the Arabian Peninsula. It is a Federal monarchy, federal elective monarchy made up of Emirates of the United Arab E ...
questioned its rating in the ''Index'', comparing its average rating with the high rating they had received from other economic freedom indexes, such as
Transparency International Transparency International e.V. (TI) is a German registered association founded in 1993 by former employees of the World Bank. Based in Berlin, its nonprofit and non-governmental purpose is to take action to combat global corruption with civil s ...
and
Moody's Moody's Ratings, previously and still legally known as Moody's Investors Service and often referred to as Moody's, is the bond credit rating business of Moody's Corporation, representing the company's traditional line of business and its histo ...
. UAE argued, calling the ''Index'' "unreliable", arguing that its methodology changed twice over the prior two years.


Rule of law


Property rights

Degree of a country's legal protection of private property rights and degree of enforcement of those laws. It is divided into the following sub-factors: # Physical property rights #
Intellectual property Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, co ...
rights # Strength of investor protection # Risk of
expropriation Nationalization (nationalisation in British English) is the process of transforming privately owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization contrasts with p ...
# Quality of land administration


Judicial effectiveness

Degree of the
judiciary The judiciary (also known as the judicial system, judicature, judicial branch, judiciative branch, and court or judiciary system) is the system of courts that adjudicates legal disputes/disagreements and interprets, defends, and applies the law ...
's efficiency and fairness, especially dealing with property laws. It is divided into the following sub-factors: # Judicial independence # Quality of the judicial process


Government integrity

Analyzes how prevalent are forms of
political corruption Political corruption is the use of powers by government officials or their network contacts for illegitimate private gain. Forms of corruption vary but can include bribery, lobbying, extortion, cronyism, nepotism, parochialism, patronage, influen ...
and practices such as
bribery Bribery is the corrupt solicitation, payment, or Offer and acceptance, acceptance of a private favor (a bribe) in exchange for official action. The purpose of a bribe is to influence the actions of the recipient, a person in charge of an official ...
,
extortion Extortion is the practice of obtaining benefit (e.g., money or goods) through coercion. In most jurisdictions it is likely to constitute a criminal offence. Robbery is the simplest and most common form of extortion, although making unfounded ...
,
nepotism Nepotism is the act of granting an In-group favoritism, advantage, privilege, or position to Kinship, relatives in an occupation or field. These fields can include business, politics, academia, entertainment, sports, religion or health care. In ...
,
cronyism Cronyism is a specific form of in-group favoritism, the spoils system practice of partiality in awarding jobs and other advantages to friends or trusted colleagues, especially in politics and between politicians and supportive organizations. ...
,
patronage Patronage is the support, encouragement, privilege, or financial aid that an organization or individual bestows on another. In the history of art, art patronage refers to the support that princes, popes, and other wealthy and influential people ...
,
embezzlement Embezzlement (from Anglo-Norman, from Old French ''besillier'' ("to torment, etc."), of unknown origin) is a type of financial crime, usually involving theft of money from a business or employer. It often involves a trusted individual taking ...
, and
graft Graft or grafting may refer to: *Graft (politics), a form of political corruption *Graft, Netherlands, a village in the municipality of Graft-De Rijp Science and technology *Graft (surgery), a surgical procedure *Grafting, the joining of plant ti ...
. It is divided into the following sub-factors: #
Public trust The concept of public trust relates back to the origins of democratic government and its seminal idea that within the public lies the true power and future of a society; therefore, whatever ''trust'' citizens place in its officials must be respe ...
in politicians # Irregular payments and bribes # transparency of government policymaking # Absence of corruption # perceptions of corruption # Governmental and civil service transparency


Government size


Tax burden

Analyzes
marginal tax In a tax system, the tax rate is the ratio (usually expressed as a percentage) at which a business or person is taxed. The tax rate that is applied to an individual's or corporation's income is determined by tax laws of the country and can be in ...
rates on personal and corporate income and the overall taxation level (including direct and indirect taxes imposed by all levels of government) as a percentage of the
GDP Gross domestic product (GDP) is a monetary measure of the total market value of all the final goods and services produced and rendered in a specific time period by a country or countries. GDP is often used to measure the economic performance o ...
. Its sub-factors are: # Top marginal tax rate on individual income # Top marginal tax rate on corporate income # Total tax burden as a percentage of
GDP Gross domestic product (GDP) is a monetary measure of the total market value of all the final goods and services produced and rendered in a specific time period by a country or countries. GDP is often used to measure the economic performance o ...


Government spending

Quantifies the burden of
government expenditure Government spending or expenditure includes all government consumption, investment, and transfer payments. In national income accounting, the acquisition by governments of goods and services for current use, to directly satisfy the individual o ...
s, including consumption by the state and all transfer payments related to various
welfare Welfare may refer to: Philosophy *Well-being (happiness, prosperity, or flourishing) of a person or group * Utility in utilitarianism * Value in value theory Economics * Utility, a general term for individual well-being in economics and decision ...
programs. The ideal level varies from country to country, but zero expenditure is used as a benchmark.


Fiscal health

Analyzes how well a country manages its budget by quantifying the growing
debt Debt is an obligation that requires one party, the debtor, to pay money Loan, borrowed or otherwise withheld from another party, the creditor. Debt may be owed by a sovereign state or country, local government, company, or an individual. Co ...
and deficit. It is divided into the following sub-factors: # Average deficits as a percentage of GDP for the most recent three years (80 percent of score) # Debt as a percentage of GDP (20 percent of score)


Regulatory efficiency


Business freedom

Analyzes the cost, time and freedom to open, operate and close a business, taking into consideration factors like electricity. It is divided into thirteen sub-factors: # Starting a business - procedures (number) # Starting a business - time (days) # Starting a business - cost (% of income per capita) # Starting a business - minimum capital (% of income per capita) # Obtaining a license - procedures (number) # Obtaining a license - time (days) # Obtaining a license - cost (% of income per capita) # Closing a business - time (years) # Closing a business - cost (% of estate) # Closing a business - recovery rate (cents on the dollar) # Getting electricity - procedures (number) # Getting electricity - time (days) and # Getting electricity - cost (% of income per capita)


Labor freedom

Quantifies the intrusiveness of
labor rights Labor rights or workers' rights are both legal rights and human rights relating to labor relations between workers and employers. These rights are codified in national and international labor and employment law. In general, the ...
such as
minimum wage A minimum wage is the lowest remuneration that employers can legally pay their employees—the price floor below which employees may not sell their labor. List of countries by minimum wage, Most countries had introduced minimum wage legislation b ...
, laws inhibiting layoffs, severance requirements, and measurable regulatory restraints on hiring and hours worked, plus the labor force participation rate as an indicative measure of employment opportunities in the labor market. It is divided into the following sub-factors: # Ratio of minimum wage to the average value added per worker # Hindrance to hiring additional workers # Rigidity of hours # Difficulty of firing redundant employees # Legally mandated notice period # Mandatory severance pay # Labor force participation rate


Monetary freedom

Analyzes how stable are prices and how much microeconomy intervenes. It is divided into the following sub-factors: # Weighted average
inflation rate In economics, inflation is an increase in the average price of goods and services in terms of money. This increase is measured using a price index, typically a consumer price index (CPI). When the general price level rises, each unit of curre ...
for the most recent three years # Price controls


Market openness


Trade freedom

Quantifies the extent to which
tariff A tariff or import tax is a duty (tax), duty imposed by a national Government, government, customs territory, or supranational union on imports of goods and is paid by the importer. Exceptionally, an export tax may be levied on exports of goods ...
and nontariff barriers affect
imports An importer is the receiving country in an export from the sending country. Importation and exportation are the defining financial transactions of international trade. Import is part of the International Trade which involves buying and receivin ...
and
exports An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is an ...
of goods and services into and out of the country. Its sub-factors are: # Trade-weighted average tariff rate # Non-tariff barriers (NTBs)


Investment freedom

Analyzes how free or constrained is the flow of investment capital of individuals and firms.


Financial freedom

Indicates
bank A bank is a financial institution that accepts Deposit account, deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital m ...
ing efficiency as well as how independent the government is from the financial sector. This aspect looks at five broad areas: # Extent of government regulation of financial services # Degree of state intervention in banks and other financial firms through direct and indirect ownership # Government influence on the allocation of credit # Extent of financial and capital market development # Openness to foreign competition


Previous methodology

The ''Index''s 2008 definition of economic freedom is "the highest form of economic freedom provides an absolute right of property ownership, fully realized freedoms of movement for labor, capital, and goods, and an absolute absence of coercion or constraint of economic liberty beyond the extent necessary for citizens to protect and maintain liberty itself." The ''Index'' scores nations on ten factors of economic freedom, separated into four categories, using statistics from organizations like the
World Bank The World Bank is an international financial institution that provides loans and Grant (money), grants to the governments of Least developed countries, low- and Developing country, middle-income countries for the purposes of economic development ...
, the
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...
,
Economist Intelligence Unit The Economist Intelligence Unit (EIU) is the research and analysis division of the Economist Group, providing forecasting and advisory services through research and analysis, such as monthly country reports, five-year country economic forecasts ...
and
Transparency International Transparency International e.V. (TI) is a German registered association founded in 1993 by former employees of the World Bank. Based in Berlin, its nonprofit and non-governmental purpose is to take action to combat global corruption with civil s ...
. In each factor, countries are scored 0 to 100, with 0 being the least free and 100 the most free. A score of 100 signifies an economic environment or set of policies that is most conducive to economic freedom. The methodology has shifted and changed as new data and measurements have become available, especially in the area of Labor Freedom, which was given its own indicator spot in 2007. The following list explains what each factor currently assesses and groups them according to their respective category:


Rule of law

*Property Rights: Degree of a country's legal protection of private property rights, degree of enforcement of those laws, independence of and corruption within the
judiciary The judiciary (also known as the judicial system, judicature, judicial branch, judiciative branch, and court or judiciary system) is the system of courts that adjudicates legal disputes/disagreements and interprets, defends, and applies the law ...
, and likelihood of
expropriation Nationalization (nationalisation in British English) is the process of transforming privately owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization contrasts with p ...
. *Freedom from corruption: The non-prevalence of
political corruption Political corruption is the use of powers by government officials or their network contacts for illegitimate private gain. Forms of corruption vary but can include bribery, lobbying, extortion, cronyism, nepotism, parochialism, patronage, influen ...
within a country, according to the
Corruption Perceptions Index The Corruption Perceptions Index (CPI) is an index that scores and ranks countries by their perceived levels of public sector corruption, as assessed by experts and business executives. The CPI generally defines corruption as an "abuse of entr ...
.


Limited government

*Fiscal freedom: How free is a country from tax burden. It comprises three quantitative measures: top marginal tax rate of both individual (1) and corporate (2) income, and total tax burden as a percentage of GDP (3). *Government size and spending: Governments' expenditures as a percentage of GDP, including consumption and transfers. The higher the percental spending, the lower the score.


Regulatory efficiency

*Business freedom: A country's freedom from the burden of regulations on starting, operating, and closing business, given factors such as time, cost and number of procedures, as well as the efficiency of government in the regulatory process. *Labor freedom: How free is a country from legal regulation on the labor market, including those relating to minimum wages, hiring and firing, hours of work and severance requirements. *Monetary freedom: How free from microeconomic intervention and price instability is a country, basing on an equation considering the weighted average inflation rate in the last three years and price controls.


Open markets

*Trade freedom: Freedom from sizeable numbers and burdens of
tariff A tariff or import tax is a duty (tax), duty imposed by a national Government, government, customs territory, or supranational union on imports of goods and is paid by the importer. Exceptionally, an export tax may be levied on exports of goods ...
s and non-tariff barriers to imports and exports of a country. *Investment freedom: Freedom from restrictions on the movement and use of investment capital, regardless of activity, within and across the country's borders. *Financial freedom: A country's independence from government control and interference in the financial sector, including banks. It considers government ownership of financial firms, extent of financial and capital market development, government influence on the allocation of credit and openness to foreign competition.


Rankings and scores


2023

''Key: ██ Free (80–100)'' ''██ Mostly Free (70–79.9)'' ''██ Moderately Free (60–69.9)'' ''██ Mostly Unfree (50–59.9)'' ''██ Repressed (0–49.9)'' Not ranked * * * * * (Since 2021, counted in China) * * * * (Since 2021, counted in China) * * * * * * * * * * * (Since 2022 due to
Russian invasion of Ukraine On 24 February 2022, , starting the largest and deadliest war in Europe since World War II, in a major escalation of the Russo-Ukrainian War, conflict between the two countries which began in 2014. The fighting has caused hundreds of thou ...
) * *


2013–2020

''Key: ██ Free (80–100)'' ''██ Mostly Free (70.0–79.9)'' ''██ Moderately Free (60.0–69.9)'' ''██ Mostly Unfree (50.0–59.9)'' ''██ Repressed (0–49.9)''


2020 scores by aspects of economic freedom

Key: Free (80–100) Mostly Free (70.0–79.9) Moderately Free (60.0–69.9) Mostly Unfree (50.0–59.9) Repressed (0–49.9)


1995–2008 rankings


See also

*
Corruption Perceptions Index The Corruption Perceptions Index (CPI) is an index that scores and ranks countries by their perceived levels of public sector corruption, as assessed by experts and business executives. The CPI generally defines corruption as an "abuse of entr ...
*
Ease of doing business index Ease or EASE may refer to: Computing * Ease (programming language) * Enhanced Acoustic Simulator for Engineers, software for optimizing acoustics Health and medicine * Methylone, marketed briefly in New Zealand as Ease *Examination of Anomalous ...
*
Gross National Happiness Gross National Happiness, (GNH; ) sometimes called Gross Domestic Happiness (GDH), is a philosophy that guides the government of Bhutan. It includes an index used to measure a population's collective happiness and well-being. The Gross National Ha ...
*
Happiness economics The economics of happiness or happiness economics is the theoretical, qualitative and quantitative study of happiness and quality of life, including positive and negative Affect (psychology), affects, well-being, life satisfaction and related co ...
*
List of countries by economic freedom This article includes a partial list of countries by economic freedom that shows the top 50 highest ranking countries and regions from two reports on economic freedom. * The ''Economic Freedom of the World Index'' is a report published by the Fra ...
*
List of freedom indices This article is a list of freedom indices produced by several non-governmental organizations that publish and maintain assessments of the state of freedom in the world, according to their own various definitions of the term, and rank countries u ...


References


External links

* {{DEFAULTSORT:Index of Economic Freedom Comparative economic systems International rankings Macroeconomic indicators Social statistics indicators The Heritage Foundation publications The Wall Street Journal