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New ideas are born every day in homes, schools, workplaces. They can further human development, improve our health and environment, create jobs and wealth. In order for these ideas to turn into reality individuals must be free to work, consume and invest without restrictions. This is the focus of the Index of Economic Freedom, an annual ranking produced by the Heritage Foundation which measures the level of economic freedom in countries around the globe.
The link between economic freedom and human well-being is proven. The adoption of progressive and transparent economic policies often translates into a significant reduction in poverty, sicknesses and ignorance. Since the inception of the ranking in 1995, economic freedom around the world has generally increased. Just three years ago, Heritage Foundation researchers could claim that the global average economic freedom score was at its highest in the history of the index. Then came the Covid-19 pandemic, its economic aftershocks, and the Russian invasion of Ukraine.
The government-imposed fiscal burdens and restrictions on the movement of people and business activity that characterized lockdowns caused severe harm to the global economy according to the Heritage Foundation. Out of 184 nations surveyed in the new edition of the report (which considers economic policies and conditions in the interval between July 1, 2021, through June 30, 2022), declines in economic freedom were registered by 115 of them, 8 were unchanged, and 8 nations could not be graded due to a lack of reliable data.
But how does the Heritage Foundation measure economic freedom in each given country? Twelve are the factors related to four key aspects of the economic environment that are graded from 0 to 100 and averaged to determine a country’s score: rule of law (and related sub-categories: property rights, government integrity, judicial effectiveness); government size (government spending, tax burden, fiscal health); regulatory efficiency (business, labor and monetary freedom); open markets (trade, investment and financial freedom). Overall, the global average score in this year’s ranking was 59.3, corresponding to a 0.7-point decline from the period before and the lowest ever recorded during the past two decades.
Only 4 countries (down from 7 in the previous edition of the report) achieved economic freedom scores of 80 or more and are thus considered economically free; 23 nations were ranked as “mostly free” with scores ranging from 70.0 to 79.9; and 56 were deemed “moderately free,” with scores of 60.0 to 69.9. Alarmingly, 93 nations—or 50% of all the nations ranked—registered economic freedom scores below 60: of those, 65 are considered “mostly unfree” (scores of 50.0 to 59.9), while in the economically “repressed" category can be found 28 countries, including China. Yet, it is also worth noting that China’s chief antagonist has not many reasons to celebrate: the U.S. is only the world's 25th freest economy. Its score has plummeted to 70.6, a 1.5-point decline from the 2022 edition of the ranking, making it America's lowest score ever in the 29-year history of the index.
As the freedom to participate actively and fully in the economy deteriorates worldwide, many hard-fought gains in all areas of civil society appear to be in jeopardy. According to the experts at the Heritage Foundation, the benefits of economic freedom go far beyond just higher incomes or reduced levels of poverty. Countries that aim for higher levels of economic freedom enjoy down the road superior levels of overall human development as measured by the United Nations Human Development Index (HDI). Remarkably, it is often the policies that governments fail to implement—rather than the counterproductive ones that are put in place—that can be the most damaging to economic growth. By providing greater economic freedom today, governments can improve educational opportunities and their citizens' living standards tomorrow.
Rank
Country/Territory
Economic Freedom Score
1
Singapore
83.9
2
Switzerland
83.8
3
Ireland
82.0
4
Taiwan
80.7
5
New Zealand
78.9
6
Estonia
78.6
7
Luxembourg
78.4
8
Netherlands
78.0
9
Denmark
77.6
10
Sweden
77.5
11
Finland
77.1
12
Norway
76.9
13
Australia
74.8
14
Germany
73.7
15
South Korea
73.7
16
Canada
73.7
17
Latvia
72.8
18
Cyprus
72.3
19
iceland
72.2
20
Lithuania
72.2
21
Czech Republic
71.9
22
Chile
71.1
23
Austria
71.1
24
United Arab Emirates
70.9
25
United States
70.6
26
Mauritius
70.6
27
Uruguay
70.2
28
United Kingdom
69.9
29
Barbados
69.8
30
Portugal
69.5
31
Japan
69.3
32
Bulgaria
69.3
33
Slovakia
69.0
34
Israel
68.9
35
Georgia
68.7
36
Qatar
68.6
37
Slovenia
68.5
38
Samoa
68.3
39
Jamaica
68.1
40
Poland
67.7.
41
Malta
67.5
42
Malaysia
67.3
43
Belgium
67.1
44
Peru
66.5
45
Costa Rica
66.5
46
Croatia
66.4
47
Cabo Verde
65.8
48
Brunei Darussalam
65.7
49
Albania
65.3
50
Armenia
68.2
51
Spain
67.9
52
Botswana
64.9
53
Romania
64.5
54
Hungary
64.1
55
Panama
63.8
56
North Macedonia
63.7
57
France
63.6
58
Serbia
63.5
59
Saint Vincent and Grenadines
63.5
60
Indonesia
63.5
61
Mexico
63.2
62
Colombia
63.1
63
Bosnia and Herzegovina
62.9
64
Guatemala
62.7
65
Dominican Republic
62.6
66
Micronesia
62.6
67
The Bahamas
62.6
68
Bahrain
62.5
69
Italy
62.3
70
Vanuatu
62.1
71
Kazakhstan
62.1
72
Vietnam
61.8
73
Mongolia
61.7
74
São Tomé and Príncipe
61.5
75
Azerbaijan
61.4
76
Paraguay
61.0
77
Montenegro
60.9
78
Kosovo
60.7
79
Saint Lucia
60.7
80
Thailand
60.6
81
Côte d'Ivoire
60.4
82
Tongoa
60.0
83
Tanzania
60.0
84
Benin
59.8
85
Belize
59.8
86
Dominica
59.7
87
Seychelles
59.5
88
Trinidad and Toba
59.5
89
Philippines
59.3
90
Bhutan
59.3
91
Madagascar
58.9
92
Kiribali
58.8
93
Jordan
58.8
94
Honduras
58.7
95
Oman
58.5
96
Moldova
58.5
97
Morococco
58.4
98
Saudi Arabia
58.3
99
Ghana
58.0
100
Fiji
58.0
101
The Gambia
57.9
102
Namibia
57.7
103
Senegal
57.7
104
Turkey
56.9
105
Guyana
56.9
106
Solomon Islands
56.9
107
Greece
56.9
108
Kuwait
56.7
109
Uzbekistan
56.5
110
Cambodia
56.5
111
Burkina Faso
56.2
112
Djibouti
56.1
113
Gabon
56.1
114
El Salvador
56.0
115
Kyrgyz Republic
55.8
116
South Africa
55.7
117
Mauritania
55.3
118
Togo
55.3
119
Ecuador
55.0
120
Eswatini
54.9
121
Nicaragua
54.4
122
Mali
54.5
123
Bangladesh
54.4
124
Nigeria
53.9
125
Russia
53.8
126
Niger
53.7
127
Brazil
53.5
128
Comoros
53.5
129
Guinea
53.2
130
Angola
53.0
131
India
52.9
132
Tunisia
52.9
133
Malawi
52.8
134
Mozambique
52.5
135
Kenya
52.5
136
Sri Lanka
52.2
137
Rwanda
52.2
138
Chad
52.0
139
Cameroon
51.9
140
Papua New Guinea
51.7
141
Leostho
51.6
142
Nepal
51.4
143
Uganda
51.4
144
Argentina
51.0
145
Belarus
51.0
146
Tajikistan
50.6
147
Laos
50.3
148
Sierra Leone
50.2
149
Haiti
49.9
150
Liberia
49.6
151
Egypt
49.6
152
Pakistan
48.3
153
Equatorial Guinea
48.1
154
China
48.3
155
Ethiopia
48.3
156
Congo, Republic of
48.1
157
Congo, Democratic Republic of the
47.9
158
Zambia
47.8
159
Timor-Leste
47.2
160
Maldives
46.6
161
Turkmenistan
46.5
162
Burma
46.5
163
Suriname
46.1
164
Lebanon
45.6
165
Guinea-Bissau
44.6
166
Central African Republic
43.8
167
Bolivia
43.4
168
Algeria
43.2
169
Iran
42.2
170
Burundi
41.9
171
Eritrea
39.5
172
Zimbabwe
39.0
173
Sudan
32.8
174
Venezuela
25.8
175
Cuba
24.3
176
North Korea
2.9
177
Afghanistan
N/A
178
Iraq
N/A
179
Libya
N/A
180
Lichtenstein
N/A
181
Somalia
N/A
182
Syria
N/A
183
Ukraine
N/A
184
Yemen
N/A
N/A — Not available. Source: 2023 Index Of Economic Freedom, The Heritage Foundation.