US economic freedom ranking improves slightly

American Thinker ^ | 10/11/2017 | Rick Moran

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The annual Economic Freedom of the World report has been released and it shows a slight improvement in the rankings for the United States. The report is copublished by the Cato Institute, the Fraser Institute in Canada and more than 70 think tanks around the world.

The criteria used to determine which countries enjoy the most economic freedom include sound money, rule of law, and security of property rights, among other factors. The US ranking had been in steady decline for the last few decades which contrasts with the ranking we enjoyed in the 1980s and early 90's when we were always seen in the top 4. Currently, the US ranks 11th behind countries like Estonia, Ireland, and Switzerland. 

Hong Kong and Singapore retain the top two positions with a score of 8.97 and 8.81 out of 10, respectively. The rest of this year’s top scores are New Zealand, 8.48; Switzerland, 8.44; Ireland, 8.19; the United Kingdom, 8.05; Mauritius, 8.04; Georgia, 8.01; Australia, 7.99; and Estonia, 7.95.

The United States, for decades among the top four countries in the index, ranks 11th. The rankings of other large economies in this year’s index are Germany (23rd), South Korea (32nd), Japan (39th), France (52nd), Italy (54th), Mexico (76th), India (95th), Russia (100th), China (112th), and Brazil (137th). The 10 lowest-rated countries are: Iran, Chad, Myanmar, Syria, Libya, Argentina, Algeria, Republic of Congo, Central African Republic, and, lastly, Venezuela.

Nations in the top quartile of economic freedom had an average per capita GDP of US$42,463 in 2015, compared to $6,036 for bottom quartile nations. Moreover, the average income of the poorest 10% in the most economically free nations is almost twice the average per capita income in the least free nations.

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The change in US rankings from 2014 to 2015 - from a score of 7.75 out of a possible 10 to 7.94 — reflects slight improvements in the size of government, sound money, and regulations.

But these numbers are from the tail end of the Obama administration, which was marked by hundreds of new regulations proposed in 2016. We should expect next year’s rankings to dip again.