Economic freedom means people are free to choose, trade, compete, invest, and have the fruits of their labor protected against aggressors within a legal framework of equal treatment and minimal interference from government. The link between economic freedom and long‐term prosperity is overwhelming: freer economies invest more, grow more rapidly, and achieve higher income levels than those that are less free.
The United States, long considered a bastion of economic freedom, has become less free during the past decade. This decline is across the board. Increases in government spending, record deficits, violation of property rights, more onerous regulation of business, and wars on terrorism and drugs have all contributed to the erosion of economic freedom in America.
For the past two decades, we have worked to develop an accurate and comprehensive measure of the extent of economic freedom across countries and time. This work resulted in the Economic Freedom of the World Annual Report, published by the Cato Institute in the United States, the Fraser Institute in Canada, and a network of institutes in 78 other countries. The Economic Freedom of the World (EFW) index uses 42 different statistical variables collected from reputable sources such as the World Bank, International Monetary Fund, and the World Economic Forum.