Reviewed by Sep 30, 2020| Updated on
An index of economic freedom compares the jurisdictions against each other for various aspects, such as trade freedom, judicial effectiveness, and tax burden. These factors may be weighed for their influence on economic freedom and collated into a single score for ranking. The ranking can be assigned based on a country or can contract to smaller sub-national units like states.
An index of economic freedom measures and ranks countries according to relevant standards judged by the creators of the index. Not all economists will agree on the relevant criteria, of course.
Indices of economic freedom consider free-market economies at the high-end of the spectrum for analysis. There is a firm correlation between both the earnings a country's citizens enjoy and the index of economic freedom ranking of such country. Investors can use the index of economic freedom as a faster way to observe the changes in economies.
Using the Economic Freedom Index, users can discover innovative ways to use the index in science, public policy, enterprise, and advocacy. The index is an excellent analytical tool for evaluating 186 economies worldwide, and each country page is a platform for examining the political and economic trends of a nation in depth.
Principal varieties of this index include free, mostly free, moderately free, moderately free, mostly unfree, primarily unfree, and repressed.
In the Index of Economic Freedom 2019, an annual guide published by The Heritage Foundation, Washington's No. 1 think tank, the ideals of economic freedom which fuelled this impressive progress was again calculated.
Over recent years, economic freedom's top countries have been relatively consistent. In 2019, Hong Kong ranked number one with a score of 90.2 overall. Singapore (89.4), New Zealand (84.4), Switzerland (81.9), Australia (80.9), and Ireland (80.5) followed to round out the economies classified safe.