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Economic Freedom by Country 2023

Global economic freedom has taken a sustained hit thanks to the aftershocks of the Covid-19 pandemic.

Author: Luca Ventura
Shanghai, China under lockdown during 2021.

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.