The Heritage Foundation conducts research every year to determine the level of economic freedom across the globe and publishes their findings as an Index of Economic Freedom. The 2014 Index covers 186 countries in six regions and ranks them on a scale ranging from “free,” “mostly free,” “moderately free,” “mostly unfree,” and “repressed.”
For analytical understanding and presentational clarity, the 10 economic freedoms are grouped into four broad categories of economic freedom:
– Rule of law (property rights, freedom from corruption);
– Government size (fiscal freedom, government spending);
– Regulatory efficiency (business freedom, labor freedom, monetary freedom); and
– Market openness (trade freedom, investment freedom, financial freedom).
Ranked countries are given a score ranging from 0 to 100 on each of the 10 components of economic freedom, and these scores are then averaged (using equal weights) to compute the country’s final economic freedom score.
The good news is that economic freedom is advancing worldwide and the economic freedom score on a global scale has reached 60.3 — which is the highest ever recorded in the 20-year history of the Index.
The not so good news is the United States doesn’t even rank in the top 10. The United States landed at #12 on the list, behind Estonia and in front of Bahrain. In fact, the United States is the only country to have recorded a loss of economic freedom for seven straight years.
With its economic freedom continuing to decline, the United States is no longer one of the world’s 10 freest economies. Its score plummeted sharply to 75.5, the second lowest rating the country has ever recorded in the 20-year history of the Index. With score declines each year from 2008 until 2014, the U.S. has dropped to 12th place, tying its lowest ranking since the inception of the Index two decades ago. Now considered only a “mostly free” economy, the U.S. has earned the dubious distinction of having recorded one of the longest sustained declines in economic freedom, second only to Argentina, of any country in the history of the Index.
The a United States has earned a score lower than the previous year, according to Heritage, primarily as a result of deteriorations in property rights, fiscal and business freedom. Click here to read a more detailed summary of the United States economic ranking.
Click here to read more in depth about the Heritage Foundations findings.