September 12, 2019 10:22AM

United States Ranks 5th in Economic Freedom

The Economic Freedom of the World: 2019 Annual Report is out today. The highest-ranking countries in this year’s index, co-published in the United States by the Fraser Institute and the Cato Institute, are Hong Kong, Singapore, New Zealand, Switzerland, and the United States.

Hong Kong still ranks first in the index—which is based on 2017 data, the most recent year for which internationally comparable data are available—but we are concerned about its ability to maintain a high position given Beijing's increasing intervention in the territory's affairs. Already we have seen a decline in Hong Kong's rule of law indicator since 2013, a worrisome trend for the overall level of economic freedom.

Economic freedom in the United States has increased since 2013, but then leveled off in the last two years of the index. However, the level of U.S. economic freedom is still notably below what it was in the year 2000, when it began a long-term decline.

The report finds that prosperity, longevity, political freedom and a whole range of indictors of human well-being are strongly associated with economic freedom. The graph below, for example, shows that economic freedom is unambiguously good for the poor, whose income is significantly higher in economically free countries than in less free ones.

The authors of the report—James Gwartney, Robert Lawson, Josh Hall, and Ryan Murphy—furthermore note that “the average income of the poorest 10% in the most economically free nations is two-thirds higher than the average per-capita income in the least-free nations.”

The countries with the lowest rankings, in descending order, are Angola, Algeria, Sudan, Libya, and Venezuela. Find out more about economic freedom and where other countries rank here.