January 13, 2009 | News Releases on Economy
The United States enjoyed the highest ranking within the region and finished sixth in the world, followed immediately by Canada.
One reason the region does so well is the North America Free Trade Agreement. "NAFTA has been a positive force enhancing economic freedom," the Index authors wrote, "connecting more than 400 million people in an economic area with about one-third of the world's total GDP."
Mexico still has a way to go to catch up with its northern neighbors, and could begin doing so by improving its investment freedom and freedom from corruption, the authors noted.
In a first for the Index, Canada, Mexico and the United States are split off from the rest of the Americas and graded as a separate region.
To compile the Index, the authors measured 183 countries across 10 specific factors of economic freedom: The higher the score, the lower the level of government interference. All countries were graded on a scale of zero to 100.
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 to produce the overall Index score.
This year's Index aims to be the most precise measure of economic freedom ever published. The authors fine-tuned their methodology. For example, they fine-tuned the "labor" component, analyzing six labor freedom factors instead of the four studied in previous Indexes.
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 183 countries ranked (the most ever), only seven were classified as "free" (a score of 80 or higher). Another 23 were rated as "mostly free" (70-79.9). The bulk of countries--120 economies--were rated either "moderately free" (60-60.9) or "mostly unfree" (50-50.9). The remaining 29 countries were rated "repressed" economies, with total freedom scores below 50.
This is the 15th consecutive year The Heritage Foundation and The Wall Street Journal have published the Index. The 2009 edition was edited by Kim Holmes, Heritage's vice president for foreign affairs, and Ambassador Terry Miller, head of Heritage's Center for International trade and Economics.Copies of the 2009 Index (455 pp., US $24.95) can be ordered at heritage.org/index or by calling 1-800-975-8625 and are available in English or Spanish. Additionally the full text, charts and graphs are available at www.heritage.org/index.
About The Wall Street Journal
The Wall Street Journal, the flagship publication of Dow Jones & Company is the world's leading business publication. Founded in 1889, The Wall Street Journal has a print and online circulation of more than 2 million, reaching the nation's top business and political leaders, as well as investors across the country. Holding 33 Pulitzer Prizes for outstanding journalism, The Wall Street Journal provides readers with trusted information and knowledge to make better decisions. The Wall Street franchise has more than 760 journalists world-wide, part of the Dow Jones network of nearly 1,900 business and financial news staff. Other publications that are part of The Wall Street Journal franchise, with a global audience of 3.8 million, include The Wall Street Journal Asia and The Wall Street Journal Europe. The Wall Street Journal Online at WSJ.com is the largest paid subscription news site on the Web with 10.9 million users each month. In 2008, the Journal was ranked No. 1 in BtoB's Media Power 50 for the ninth consecutive year. The Wall Street Journal Radio Network services news and information to more than 310 radio stations in the U.S.
About The Heritage Foundation
The Heritage Foundation is the nation's most broadly supported public policy research institute, with more than 390,000 individual, foundation and corporate donors. Founded in 1973, Heritage now has a staff of 244 and an expense budget of $61 million.