Hong Kong heads the 2009 Index of Economic Freedom
Hong Kong heads the 2009 Index of Economic Freedom, an analysis published annually by The Wall Street Journal and the US Heritage Foundation. Ireland gets a fourth ranking.
Europe boasts fully half of the world's 20 freest economies, according to the Index.
"Europe comprises 43 countries and, taken as a whole, is enjoying economic prosperity and stability," the 2009 Index editors wrote. The continent performs at or above the world average in each of the Index's 10 categories of economic freedom, and does particularly well in both investment freedom and financial freedom.
Ireland is the highest ranking European country in the latest Index, and rated fourth best in the world in economic freedom. Denmark is ranked eighth, Switzerland ninth and the United Kingdom tenth. The Netherlands, Estonia, Iceland, Luxembourg, Finland and Belgium also made the top 20.
At the other end of the scale, "only Russia and a few other countries that emerged from the breakup of the Soviet Union and Yugoslavia have failed to embrace the principles of economic freedom," the editors noted. Russia was rated "mostly unfree." Ukraine and Belarus were the only European economies rated as "unfree."
Of course, having been communist doesn't mean an economy is doomed to remain repressed. "Georgia is a leader in labour freedom and fiscal freedom because of a combination of low taxes and a highly flexible labor market," the authors observed.
Ireland's economic freedom score is 82.2, making its economy the 4th freest in the 2009 Index. Its score decreased by 0.3 point from last year, reflecting modest declines in fiscal freedom and labor freedom. Ireland is ranked 1st out of 43 countries in the Europe region, and its overall score is well above the world average.
The 2009 Index has expanded its country coverage significantly to 183 economies, although four of these could not be graded because of insufficient data. Levels of economic freedom in 10 areas were rated on a scale of zero to 100. The higher the score, the lower the level of government interference in the marketplace.
The 10 freedoms measured are: business freedom, trade freedom, fiscal freedom, government size, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption and labor freedom. Ratings in each category were averaged, then totaled to produce an overall Index score.
Worldwide, the average rating for economic freedom held essentially steady this year. However, "there is a real possibility that the economic freedom scores in this edition might represent the historical high point for economic freedom in the world," the authors warned. As governments attempt to stave off a global recession, their meddling could threaten economic freedom and long-term economic prosperity.
Of the 179 countries ranked (the most ever), only seven were classified as "free" (a score of 80 or higher). Another 23 were rated "mostly free" (70-79.9). The bulk of countries--120 economies--were found to be either "moderately free" (60-60.9) or "mostly unfree" (50-50.9). The remaining 29 countries have "repressed" economies, with total freedom scores below 50.