U.S. Ranked 5th in the World in Economic Freedom

The recently published Economic Freedom of the World report measures the degree to which the policies and institutions of a country support economic freedom.  The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to compete, and security of privately owned property. Forty-two data points are used to construct a summary index and to measure the degree of economic freedom in five broad areas:

1. Size of Government: Expenditures, Taxes, and Enterprises;
2. Legal Structure and Security of Property Rights;
3. Access to Sound Money;
4. Freedom to Trade Internationally;
5. Regulation of Credit, Labor, and Business.

• In this year’s index, Hong Kong retains the highest rating for economic freedom, 8.97 out of 10. The other top 10 nations are: Singapore (8.66), New Zealand (8.30), Switzerland (8.19), Chile (8.14), the United States (8.06), Ireland (7.98), Canada (7.91), Australia (7.89), and the United Kingdom (7.89)
• The rankings of other large economies are Germany, 27 (7.50), Japan 30 (7.46), France 33 (7.43), Italy 61 (6.95), Mexico 68 (6.85), Russia 83 (6.50), China 82 (6.54), India 86 (6.45), and Brazil 111 (6.00)
• 12 nations increased their score by more than 2.50 points since 1980, though most started from a very low base. With the increase noted in parentheses, they are: Ghana (3.69), Uganda (3.31), Israel (3.24), Jamaica (2.80), Peru (2.78), Hungary (2.66), El Salvador (2.54), Mauritius (2.52), Nigeria (2.52), Iran (2.51), Nicaragua (2.51), and Chile (2.50)
• Only three nations decreased their score by more than one point, Zimbabwe (−2.33), Venezuela (−2.26), and Myanmar (−1.58)
• Eight of the nations in the bottom 10 are African. The other two nations are Venezuela and Myanmar. The ten nations are: Zimbabwe (2.89), Myanmar (3.69), Angola (4.04), Venezuela (4.33), Republic of the Congo (4.44), Central African Republic (4.79), Guinea-Bissau (4.84), Democratic Republic of the Congo (5.00), Chad (5.09), and Niger (5.11)