For much of human history, most individuals have lacked economic freedom and opportunity, condemning them to poverty and deprivation.
Today, we live in the most prosperous time in human history. Poverty, sicknesses, and ignorance are receding throughout the world, due in large part to the advance of economic freedom. In 2014, the principles of economic freedom that have fueled this monumental progress are once again measured in the Index of Economic Freedom, an annual guide published by The Wall Street Journal and The Heritage Foundation, Washington’s No. 1 think tank.
This year marks the 20th anniversary of the Index of Economic Freedom. With its user friendly format and straight-forward analysis, readers can track up to two decades of advancement in economic freedom, prosperity, and opportunity.
The Index covers 10 freedoms – from property rights to entrepreneurship – in 186 countries.
Index authors and expert analysts are available for media interviews and speaking events.
Frequently Asked Questions
Q.1. What is economic freedom?
Economic freedom is the fundamental right of every human to control his or her own labor and property. In an economically free society, individuals are free to work, produce, consume, and invest in any way they please. In economically free societies, governments allow labor, capital and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself.
Q.2. What are the benefits of economic freedom?
Economic freedom brings greater prosperity. The Index of Economic Freedom documents the positive relationship between economic freedom and a variety of positive social and economic goals. The ideals of economic freedom are strongly associated with healthier societies, cleaner environments, greater per capita wealth, human development, democracy, and poverty elimination. For further information, see especially:
Q.3. How do you measure economic freedom?
We measure economic freedom based on 10 quantitative and qualitative factors, grouped into four broad categories, or pillars, of economic freedom:
- Rule of Law (property rights, freedom from corruption);
- Limited Government (fiscal freedom, government spending);
- Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and
- Open Markets (trade freedom, investment freedom, financial freedom).
Each of the ten economic freedoms within these categories is graded on a scale of 0 to 100. A country’s overall score is derived by averaging these ten economic freedoms, with equal weight being given to each. More information on the grading and methodology can be found in the appendix.
Q.4. Which components of economic freedom are most important?
The Index of Economic Freedom considers every component equally important in achieving the positive benefits of economic freedom. Each freedom is weighted equally in determining country scores. Countries considering economic reforms may find significant opportunities for improving economic performance in those factors in which they score the lowest. These factors may indicate significant binding constraints on economic growth and prosperity.
Q.5. What is your period of study?
For the 2014 , most data covers the second half of 2012 through the first half of 2013. To the extent possible, the information considered for each factor was current as of June 30, 2013.It is important to understand that some factors are based on historical information. For example, the monetary policy factor is a 3-year weighted average rate of inflation from January 1, 2010, to December 31, 2012.
Q.6. Can I access the data online?
The Index of Economic Freedom can be easily explored using a variety of tools on our interactive website, including:
- Country Rankings: See where your country ranks in the Index and compared to its peers, and keep up with political and economic developments on each country’s page.
- Graph the Data: Customize and compare country scores in up to three countries using interactive graphics.
- Explore the Data: Download 20 years of historical Index data, including macroeconomic indicators, and a regional breakdown of Index scores since 1995.
- Heat Map: Visualize the 2014 Index of Economic Freedom in this stunning and interactive map of the world. Find out how competitive your region is in achieving the ideals of economic freedom.
- Downloads: Download the entire Index of Economic Freedom book, or pick individual chapters, the methodology, or regional maps.
Q.7. How can I use the Index of Economic Freedom?
The Index of Economic Freedom is a helpful tool for a variety of audiences, including academics, policymakers, journalist, students, teachers, and those in business and finance. The Index provides an objective tool for analyzing 186 economies throughout the world. Each country page is a resource for in-depth analysis of a country’s political and economic developments. Historical Index data can provide vital long-term insights. Furthermore, the 10 economic freedoms provide a comprehensive set of principles for those who wish to understand the fundamentals of economic growth and prosperity.
Video From the Launch Event