According to free-market economists, economic freedom is the key to prosperity and growth.

Author: Luca Ventura

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 of the Washington's think-tank Heritage Foundation which measures the level of economic freedom in countries around the globe.

The link between economic freedom and human wellbeing is proven. If poverty, sicknesses and ignorance—the researchers say—are receding across all regions, it is largely due to the widespread adoption of more progressive and transparent economic policies. Out of 180 economies surveyed in the 2020 edition of the report, increases in economic freedom were registered by 124 of them. Twelve are the factors related to four key-aspects of the economic environment that were graded from 0 to 100 and averaged to determine a country’s score: rule of law (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 was 61.6, corresponding to a 0.8 point gain from the year before or a 1.3% increase—the highest ever recorded since the index was first published in 1995.

However, as the freedom to participate actively and fully in the economy grows worldwide, these hard-fought gains appear to be in jeopardy. As the COVID-19 pandemic continues to play out across nations and governments try to strike a balance between public health and economic health, people’s economic prospects and opportunities have often been reduced or put on hold. The coronavirus, some have pointed out, will turn the economic freedom ranking inside-out. Yet, the editor of the index Anthony B. Kim countered, countries with greater levels of economic freedom are better positioned to produce more favorable outcomes when they are faced with calamities such as the current outbreak. Indeed, many nations ranking in the top positions of the index are also among those which have reacted more promptly and effectively when the pandemic struck.


Rank

Country

Economic Freedom Score

1 Singapore 89.4
2 Hong Kong 89.1
3 New Zealand 84.1
4 Australia 82.6
5 Switzerland 82.0
6 Ireland 80.9
7 United Kingdom 79.3
8 Denmark 78.3
9 Canada 78.2
10 Estonia 77.7
11 Georgia 77.1
12 Iceland 77.1
13 Taiwan 77.1
14 Netherlands 77.0
15 Chile 76.8
16 Lithuania 76.7
17 United States 76.6
18 United Arab Emirates 76.2
19 Luxembourg 75.8
20 Finland 75.7
21 Mauritius 74.9
22 Sweden 74.9
23 Czech Republic 74.8
24 Malaysia 74.7
25 Israel 74.0
26 South Korea 74.0
27 Germany 73.5
28 Norway 73.4
29 Austria 73.3
30 Japan 73.3
31 Qatar 72.3
32 Latvia 71.9
33 Rwanda 70.9
34 Armenia 70.6
35 Macau 70.3
36 Bulgaria 70.2
37 Cyprus 70.1
38 Romania 69.7
39 Botswana 69.6
40 Kazakhstan 69.6
41 Macedonia 69.5
42 Malta 69.5
43 Thailand 69.4
44 Azerbaijan 69.3
45 Colombia 69.2
46 Poland 69.1
47 Uruguay 69.1
48 Belgium 68.9
49 Jamaica 68.5
50 Saint Lucia 68.2
51 Peru 67.9
52 Slovenia 67.8
53 Kosovo 67.4
54 Indonesia 67.2
55 Panama 67.2
56 Portugal 67.0
57 Albania 66.9
58 Spain 66.9
59 St. Vincent & the Grenadines 66.8
60 Slovak Republic 66.8
61 Brunei Darussalam 66.6
62 Hungary 66.4
63 Bahrain 66.3
64 France 66.0
65 Jordan 66.0
66 Mexico 66.0
67 Serbia 66.0
68 Costa Rica 65.8
69 Bahamas 64.5
70 Philippines 64.5
71 Turkey 64.4
72 Seychelles 64.3
73 Guatemala 64.0
74 Italy 63.8
75 Cabo Verde 63.6
76 Oman 63.6
77 Fiji 63.4
78 Morocco 63.3
79 Kuwait 63.2
80 Paraguay 63.0
81 Kyrgyz Republic 62.9
82 Bosnia and Herzegovina 62.6
83 Saudi Arabia 62.4
84 Croatia 62.2
85 Bhutan 62.1
86 Samoa 62.1
87 Moldova 62.0
88 Belarus 61.7
89 Tanzania 61.7
90 El Salvador 61.6
91 Montenegro 61.5
92 Barbados 61.4
93 Honduras 61.1
94 Russia 61.0
95 Dominican Republic 60.9
96 Namibia 60.9
97 Dominica 60.8
98 Vanuata 60.7
99 Madagascar 60.5
100 Greece 59.9
101 Côte d'Ivoire 59.7
102 China 59.5
103 Uganda 59.5
104 Ghana 59.4
105 South Africa 58.8
106 Tonga 58.8
107 Vietnam 58.8
108 Papa New Guinea 58.4
109  Trinidad and Tobago 58.3
110 Senegal 58.0
111 Belize 57.4
112 Sri Lanka 57.4
113 Cambodia 57.3
114 Nicaragua 57.2
115 Nigeria 57.2
116 Uzbekistan 57.2
117 Burkina Faso 56.7
118 Gabon 56.7
119 Guinea 56.5
120 India 56.5
121 Maldives 56.5
122 Bangladesh 56.4
123 Gambia 56.3
124 Guyana 56.2
125 São Tomé and Príncipe 56.2
126 Mali 55.9
127 Mongolia 55.9
128 Tunisia 55.8
129 Lao P.D.R. 55.5
130 Eswatini 55.3
131 Kenya 55.3
132 Mauritania 55.3
133 Benin 55.2
134 Ukraine 54.9
135 Pakistan 54.3
136 Afghanistan 54.7
137 Niger 54.7
138 Lesotho 54.5
139 Nepal 54.2
140 Togo 54.1
141 Burma 54.0
142 Egypt 54.0
143 Brazil 53.7
144 Comoros 53.7
145 Cameroon 53.6
146 Ethiopia 53.6
147 Zambia 53.5
148 Guinea-Bissau 53.3
149 Argentina 53.1
150 Djibouti 52.9
151 Solomon Islands 52.8
152 Malawi 52.8
153 Haiti 52.3
154 Angola 52.2
155 Tajikistan 52.2
156 Micronesia 52.0
157 Lebanon 51.7
158 Ecuador 51.3
159 Central African Republic 50.7
160 Mozambique 50.5
161 Chad 50.2
162 Congo, Democratic Republic 49.5
163 Suriname 49.5
164 Iran 49.2
165 Burundi 49.0
166 Liberia 49.0
167 Equatorial Guinea 48.3
168 Sierra Leone 48.0
169 Algeria 46.9
170 Turkmenistan 46.5
171 Timor-Leste 45.9
172 Kirbati 45.2
173 Sudan 45.0
174 Zimbabwe 43.1
175 Boliia 42.8
176 Congo, Republic of 41.8
177 Eritrea 38.5
178 Cuba 26.9
179 Venezuela 25.2
180 North Korea 4.2
181 Iraq N/A
182 Libya N/A
183 Liechtenstein N/A
184 Somalia N/A
185 Syria N/A
186 Yemen N/A

N/A — Not available. Source: 2020 Index Of Economic Freedom, The Heritage Foundation.