What is the Economic Freedom Index?

The index of economic freedom is an annual index and it was introduced in 1995 by conservative think -tank of  “  ‘the Heritage foundation’ and  ‘ the wall street Journal’ “ to measure the degree of economic freedom across the world nations.

Few Key facts :

  • The economic freedom index 2021 was released on 04 – MAR – 2021
  • This index was Prepared By the think Tank of ‘the Heritage foundation’ and ‘ the wall street Journal’ and covering 184 Countries.
  • Singapore topped the global ranking for the second year. Singapore increased its overall score in the year 2021 by 0.3 points to 89.7 primarily due to an improvement in the score for government spending.
  • Rounding up the global top five are New Zealand in second place with 83.9 points, Australia, third (82.4 points), Switzerland in fourth with 81.9 points, and Ireland (81.4 points).
  • In Asia-Pacific, India ranked 26th among the 40 countries. China is number 107th scoring 58.4 points.
  • The least Economic freedom countries are- North Korea (178th), Venezuela (177th), and Cuba (176th).
  • The countries are classified into the following Categories.
    • Free: Score (100 – 80, five countries are in this category
    • Mostly Free: Score (79.9 – 70), 56 countries are in this category
    • Moderately Free: Score (69.9 – 60), 63 countries are in this category
    • Repressed: Score (0 – 49.9), 18 countries are in this category

Economic Freedom Index 2021

What is Economic Freedom?

As per the Heritage Foundation and its states that  “ Economic freedom is the fundamental right of every human to control his or her own labor and property. In an economically free society, individuals are free to work, produce, consume, and invest in any way they please. In economically free societies, governments allow labor, capital, and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself.”

How do you measure economic freedom?

We measure economic freedom based on 12 quantitative and qualitative factors, grouped into four broad categories, or pillars, of economic freedom:

  1. Rule of Law (property rights, government integrity, judicial effectiveness)
  2. Government Size (government spending, tax burden, fiscal health)
  3. Regulatory Efficiency (business freedom, labor freedom, monetary freedom)
  4. Open Markets (trade freedom, investment freedom, financial freedom)

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

Below is the list of countries with their Ranking in the Economic Freedom Index.

FREE (100-80)

Rank Country Overall Change rank Country Overall Change
1 Singapore 89.7 +0.3 4 Switzerland 81.9 -0.1
2 New Zealand 83.9 -0.2 5 Ireland 81.4 +0.5
3 Australia 82.4 -0.2

 

MOSTLY FREE (79.9 – 70)

Rank Country Overall Change rank Country Overall Change
6 Taiwan 78.6 +1.5 23 Japan 74.1 +0.8
7 United Kingdom 78.4 -0.9 24 South Korea 74.0 0.0
8 Estonia 78.2 +0.5 25 Austria 73.9 +0.6
9 Canada 77.9 -0.3 26 Israel 73.8 -0.2
10 Denmark 77.8 -0.5 27 Czech Republic 73.8 -1.0
11 Iceland 77.4 +0.3 28 Norway 73.4 0.0
12 Georgia 77.2 +0.1 29 Germany 72.5 -1.0
13 Mauritius 77.0 +2.1 30 Latvia 72.3 +0.4
14 United Arab Emirates 76.9 +0.7 31 Qatar 72.0 -0.3
15 Lithuania 76.9 +0.2 32 Armenia 71.9 +1.3
16 Netherlands 76.8 -0.2 33 Cyprus 71.4 +1.3
17 Finland 76.1 +0.4 34 Kazakhstan 71.1 +1.5
18 Luxembourg 76.0 +0.2 35 Bulgaria 70.4 +0.2
19 Chile 75.2 -1.6 36 Malta 70.2 +0.7
20 United States 74.8 -1.8 37 Belgium 70.1 +1.2
21 Sweden 74.7 -0.2 38 Azerbaijan 70.1 +0.8
22 Malaysia 74.4 -0.3

MODERATELY FREE (69.9 – 60)

Rank Country Overall Change rank Country Overall Change
39 Spain 69.9 +3.0 69 Jordan 64.6 -1.4
40 Bahrain 69.9 +3.6 70 The Bahamas 64.6 +0.1
41 Poland 69.7 +0.6 71 Oman 64.6 +1.0
42 Thailand 69.7 +0.3 72 Costa Rica 64.2 -1.6
43 Romania 69.5 -0.2 73 Philippines 64.1 -0.4
44 Uruguay 69.3 +0.2 74 Kuwait 64.1 +0.9
45 Jamaica 69.0 +0.5 75 Guatemala 64.0 0.0
46 North Macedonia 68.6 -0.9 76 Turkey 64.0 -0.4
47 Rwanda 68.3 -2.6 77 Cabo Verde 63.8 +0.2
48 Slovenia 68.3 +0.5 78 Kyrgyz Republic 63.7 +0.8
49 Colombia 68.1 -1.1 79 Croatia 63.6 +1.4
50 Peru 67.7 -0.2 80 Montenegro 63.4 +1.9
51 Botswana 67.6 -2.0 81 Morocco 63.3 0.0
52 Portugal 67.5 +0.5 82 Bosnia and Herzegovina 62.9 +0.3
53 Saint Lucia 67.5 -0.7 83 Namibia 62.6 +1.7
54 Serbia 67.2 +1.2 84 Paraguay 62.6 -0.4
55 Hungary 67.2 +0.8 85 Moldova 62.5 +0.5
56 Indonesia 66.9 -0.3 86 Mongolia 62.4 +6.5
57 Brunei Darussalam 66.6 0.0 87 Fiji 62.2 -1.2
58 Kosovo 66.5 -0.9 88 Dominican Republic 62.1 +1.2
59 Saint Vincent and the Grenadines 66.3 -0.5 89 Samoa 61.9 -0.2
60 Seychelles 66.3 +2.0 90 Vietnam 61.7 +2.9
61 Slovak Republic 66.3 -0.5 91 Côte d’Ivoire 61.7 +2.0
62 Panama 66.2 -1.0 92 Russia 61.5 +0.5
63 Saudi Arabia 66.0 +3.6 93 Tanzania 61.3 -0.4
64 France 65.7 -0.3 94 El Salvador 61.0 -0.6
65 Mexico 65.5 -0.5 95 Belarus 61.0 -0.7
66 Albania 65.2 -1.7 96 Greece 60.9 +1.0
67 Barbados 65.0 +3.6 97 Vanuatu 60.5 -0.2
68 Italy 64.9 +1.1  

 

MOSTLY UNFREE (59.9 – 50)

Rank Country Overall Change rank Country Overall Change
98 Honduras 59.8 -1.3 130 Egypt 55.7 +1.7
99 South Africa 59.7 +0.9 131 Sri Lanka 55.7 -1.7
100 Benin 59.6 +4.4 132 Comoros 55.7 +2.0
101 Ghana 59.2 -0.2 133 Mali 55.6 -0.3
102 Trinidad and Tobago 59.0 +0.7 134 Tajikistan 55.2 +3.0
103 Papua New Guinea 58.9 +0.5 135 Burma 55.2 +1.2
104 The Gambia 58.8 +2.5 136 Maldives 55.2 -1.3
105 Nigeria 58.7 +1.5 137 Eswatini 55.1 -0.2
106 Uganda 58.6 -0.9 138 Kenya 54.9 -0.4
107 China 58.4 -1.1 139 Guinea-Bissau 54.9 +1.6
108 Uzbekistan 58.3 +1.1 140 Angola 54.2 +2.0
109 Bhutan 58.3 -3.8 141 Laos 53.9 -1.6
110 Gabon 58.1 +1.4 142 Lesotho 53.5 -1.0
111 Senegal 58.0 0.0 143 Brazil 53.4 -0.3
112 Madagascar 57.7 -2.8 144 Cameroon 53.4 -0.2
113 Togo 57.5 +3.4 145 Malawi 53.0 +0.2
114 Belize 57.5 +0.1 146 Afghanistan 53.0 -1.7
115 Tonga 57.5 -1.3 147 Dominica 53.0 -7.8
116 Guyana 57.4 +1.2 148 Argentina 52.7 -0.4
117 Niger 57.3 +2.6 149 Ecuador 52.4 +1.1
118 Cambodia 57.3 0.0 150 Sierra Leone 51.7 +3.7
119 Tunisia 56.6 +0.8 151 Ethiopia 51.7 -1.9
120 Bangladesh 56.5 +0.1 152 Pakistan 51.7 -3.1
121 India 56.5 0.0 153 Mozambique 51.6 +1.1
122 Solomon Islands 56.5 +3.6 154 Lebanon 51.4 -0.3
123 Guinea 56.5 0.0 155 Haiti 50.8 -1.5
124 Burkina Faso 56.5 -0.2 156 Republic of Congo 50.7 +8.9
125 Nicaragua 56.3 -0.9 157 Nepal 50.7 -3.5
126 Djibouti 56.2 +3.3 158 Chad 50.4 +0.2
127 Ukraine 56.2 +1.3 159 Zambia 50.4 -3.1
128 Mauritania 56.1 +0.8 160 Micronesia 50.4 -1.6
129 São Tomé and Príncipe

 

REPRESSED (49.9 – 0)

Rank Country Overall Change rank Country Overall Change
161 Burundi 49.9 +0.9 170 Timor-Leste 44.7 -1.2
162 Algeria 49.7 +2.8 171 Kiribati 44.4 -0.8
163 Equatorial Guinea 49.2 +0.9 172 Bolivia 42.7 -0.1
164 Liberia 49.2 +0.2 173 Eritrea 42.3 +3.8
165 Democratic Republic of Congo 49.0 -0.5 174 Zimbabwe 39.5 -3.6
166 Central African Republic 48.8 -1.9 175 Sudan 39.1 -5.9
167 Turkmenistan 47.4 +0.9 176 Cuba 28.1 +1.2
168 Iran 47.2 -2.0 177 Venezuela 24.7 -0.5
169 Suriname 46.4 -3.1 178 North Korea 5.2 +1.0

 

NOT RANKED:

Rank Country Overall Change rank Country Overall Change
N/A Iraq N/A N/A N/A Somalia N/A N/A
N/A Libya N/A N/A N/A Syria N/A N/A
N/A Liechtenstein N/A N/A N/A Yemen N/A N/A

Reference: https://www.heritage.org/index/ranking

You can also read: CCPI INDEX

 

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