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U.S. surges into top 5 economically free nations

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For the second year in a row, the United States has increased its ranking in a comparison of the world’s freest economies. The good news came as the Fraser Institute released its annual “Economic Freedom of the World” report this morning.

“The U.S. has ascended back into the top five most economically-free countries in the world,” said Fred McMahon, research chair at the Fraser Institute, which is based in Canada.

The United States fell to 16th place in 2015 but rebounded in last year’s ratings to sixth. This year, the U.S. ranked fifth out of 162 nations covered in the survey.

The institute ranks every nation’s government based on four factors: the size of government, the rule of law and respect for property rights, a sound (low-inflation) money supply, free trade, and regulation. It further adjusts the ratings based on its measure of gender disparity.

The 2019 report covers conditions in 2017, the most recent year for which data are available. This also marks the first year of the Trump administration, which signedthe Tax Cuts and Jobs Act of 2017 into law three days before Christmas and authored an executive order curbingunnecessary and often duplicative federal regulations. The report came before the recent rounds of reciprocal tariffs against China and the European Union.

Hong Kong again ranked as the freest nation in the world, although China’s increasingly menacing influence over the special administrative region may reduce its reputation for economic and political freedom in the future.

“While Hong Kong remains the most economically-free jurisdiction in the world, interference from China – including the violent crackdown of pro-democracy protests – severely threatens Hong Kong’s rule of law, which helps ensure equal freedom for all, and endangers Hong Kong’s top position,” McMahon said.

The 10 most economically free nations in 2017 were:

  1. Hong Kong
  2. Singapore
  3. New Zealand
  4. Switzerland
  5. United States of America
  6. Ireland
  7. United Kingdom
  8. Canada
  9. Australia / Mauritius (tie)
  10. Malta (technically 11 under the Fraser Institute’s rating system)

The 10 least economically free nations in 2017 were:

  1. Central African Republic / Guinea-Bissau (tie, technically for spot 151 under its rating system)
  2. Iraq (technically 153)
  3. Republic of Congo (technically 154)
  4. Egypt / Syria (tie, technically 155)
  5. Democratic Republic of Congo
  6. Angola
  7. Algeria
  8. Sudan
  9. Libya
  10. Venezuela

Certain countries – including North Korea and Cuba – are not ranked, due to lack of data.

The results for European nations often fail to conform to American stereotypes. For instance, Bernie Sanders’ “democratic socialist” utopia had the fifth freest economy in Europe. Denmark, whose intellectual leaders have taken pains to point out is not a socialist nation, ranked seven spots higher than Germany (13 and 20, respectively).

Other noteworthy results from Europe include Georgia (12) Estonia (13), Lithuania (16), Luxembourg (17), Finland (21), Czech Republic (22), Iceland (23), Latvia (24), the Netherlands (25), Austria (26), Romania (28), Norway (32), Sweden (35), Spain (36), Bulgaria (37), Portugal (39), Belgium (40), Slovak Republic (tied at 40),

Western nations in the second quartile include Italy (46), France (50), Hungary (54), Croatia (56), Poland (59), Slovenia (67), and Serbia (80). Russia (85) and Greece (102) joined a handful of European nations in the bottom half of the world’s free economies.

The least economically free nation in Europe is Ukraine, at 135, making it less economically free than Vietnam, China, or Burkina Faso.

The global trend remains positive, albeit less markedly than in the recent past. “While the pace of liberalization has certainly slowed in the 2000s compared to the 1980s and 1990s, these figures confirm that economic liberalization continues in most countries even into the new millennium,” the report says.

Christians should care about this report because economic freedom benefitsthe global poor, including providing a much higher income and greater longevity.

The culture the Christian should pursue “fosters trust in the human potential of the poor, and consequently in their ability to improve their condition through work or to make a positive contribution to economic prosperity. But to accomplish this, the poor – be they individuals or nations – need to be provided with realistic opportunities,” wrote Pope John Paul II in Centesimus Annus. He called on nations to stop “excluding them from the sources of well-being,” something he mentioned in the same breath as “violating their rights.”

This report makes clear that economic freedom is a source of well-being that should be shared as broadly as possible.

You can read the full report here. You can see its updated global map here.

Compare this year’s ratings to 2018 and 2017.

(Photo credit: Screenshot.)

 

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Rev. Ben Johnson Rev. Ben Johnson is Senior Editor at the Acton Institute.

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