The 2016 Economic Freedom Index

The 2016 edition of the Economic Freedom Index has been released. It's a yearly ranking of almost all countries by their level of economic freedom. The Index uses data from business, trade, governance and policy to generate a score of 0 to 100, with 100 being the most free. Countries with a business friendly tax code and governments that encourage innovation and entrepreneurship rank higher on the index, and enjoy a higher level of prosperity than others.

These are the top ten economically free countries.

1. Hong Kong
2. Singapore
3. New Zealand
4. Switzerland
5. Australia
6. Canada
7. Chile
8. Ireland
9. Estonia
10. United Kingdom

And these are the ten least economically free countries.

178. North Korea
177. Cuba
176. Venezuela
175. Zimbabwe
174. Turkmenistan
173. Eritrea
172. Rep. of Congo
171. Iran
170. Equatorial Guinea
169. Argentina

Here's a link to the index where you can view all of the countries that are listed.



They also explain how they measure economic freedom.

Q.3. How do you measure economic freedom?

We measure economic freedom based on 10 quantitative and qualitative factors, grouped into four broad categories, or pillars, of economic freedom:

Rule of Law (property rights, freedom from corruption);
Limited Government (fiscal freedom, government spending);
Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and
Open Markets (trade freedom, investment freedom, financial freedom).

Each of the ten economic freedoms within these categories is graded on a scale of 0 to 100. A country’s overall score is derived by averaging these ten economic freedoms, with equal weight being given to each.

Here's a video that explain Economic Freedom:




The following link shows all of the info on how they rank economic freedom and what the benefits are for more economic freedom.

www.heritage.org...


There's also another index that ranks personal freedom in addition to economic freedom, showing which countries are more free in general. The last update was in 2015. (pdf file)



And here is the spreadsheet with the data (xlsx file)

The top 10 jurisdictions in order were Hong Kong, Switzerland, Finland, Denmark, New Zealand, Canada, Australia, Ireland, the United Kingdom, and Sweden.

www.cato.org...

The index published here presents a broad measure of human freedom, understood as the absence of coercive constraint. It uses 76 distinct indicators of personal and economic freedom in the following areas:

Rule of Law
Security and Safety
Movement
Religion
Association, Assembly, and Civil Society
Expression

Relationships
Size of Government
Legal System and Property Rights
Access to Sound Money
Freedom to Trade Internationally
Regulation of Credit, Labor, and Business

Additional links and videos:

www.freetheworld.com...

Economic freedom has been shown in numerous peer-reviewed studies to promote prosperity and other positive outcomes. It is a necessary condition for democratic development. It liberates people from dependence on government in a planned economy, and allows them to make their own economic and political choices. For information on the effects of economic freedom, please see papers.

Well United States is at 11, just shy of the top ten. Can't say I'm too surprised, at our ranking not being in the top.

United States

I am kind of surprised the "freedom from corruption" is marked as going up. But I've not read over the chart all the way so I might be miss read how this information is to be viewed.

Singapore might be very economically free but errrmahhhgerdddd everything is illegal.

Literally. You can't chew gum in Singapore.

My roommate is going to visit his girlfriend there next week.

He is very paranoid now because she told him about the random drug screening they do at the airports for arrivals. Apparently, if selected and found to have traces of anything in your system, they can jail you for up to TWO YEARS

a reply to: Psychonautics

That's why they rank much lower on the personal freedom index.

a reply to: TheBandit795

Of the top 10, ONLY Hong Kong and Singapore can be fairly characterized as strongly capitalist. I have my own system and may share it with ATS at some point. The US is NOT capitalist. Its not. Its spending level puts firmly in a mixed economy, with roughly 40% of the economy being government controlled. Hong Kong and Singapore government spending is at roughly 10% of the total economy.

And yet POOR PEOPLE who are alleged to be the WORST OFF by capitalist, STREAM IN HUGE NUMBERS TO HONG KONG AND SINGAPORE. Do you see poor people breaking down doors to get to Portugal who hit the 50% number?

Something seems a bit weird about this list, as an Australian I find it extremely hard to believe Australia would be at #5. We have some of the highest living costs in the world and when you compare our level of innovation and development to other developed nations we are behind, with slower internet speeds, smaller numbers of businesses being started, etc. How exactly does one define and measure "economic freedom"? A quick Google search defines it as "It's the freedom to choose how to produce, sell, and use your own resources, while respecting others' rights to do the same.". That's a very abstract definition and I imagine it would be difficult to measure.

If I'm reading that definition correctly it seems to imply that economic freedom is having a government which doesn't interfere with private assets and operations, so it's basically a measure of how many business regulations are in place, and even by that measure I find it hard to believe Australia would be #5, we aren't exactly living in a wild west state here, it seems to me that it's much easier to start up a new business in the U.S. compared to Australia. I even have to buy things from the U.S. on occasion because there simply isn't any business in Australia which can sell me the product I want. And in terms of regulations, just look at our strict cannabis laws or the long ban we had on R rated games. If we really are #5 the world is in a sad state.

a reply to: ChaoticOrder

They give an explanation on their findings of Australia here. Their/your score has been dropping the last several years.

www.heritage.org...