January 20, 2010 | News Releases on Index of Economic Freedom
But the news isn't all positive. Economic freedom receded in 18 economies, including the United Kingdom, Ireland and Iceland.
"Overall, extensive and long-established free-market institutions in most countries allow the region to score above the world average in seven of the 10 economic freedoms," the 2010 Index editors write.
And indeed, nine of the world's 20 freest countries are in Europe. Ireland, whose global ranking has fallen to 5th, is closely followed by Switzerland at 6th and Denmark at 9th. The United Kingdom now stands at 11th, falling out of the top 10 in the Index for the first time.
Some 80 percent of the countries in the region were ranked as "moderately free" or "mostly free." Only Ukraine and Belarus are rated as "unfree."
The 2010 Index reviewed once again reviewed 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 and totaled to produce an overall Index score.
Worldwide, the average rating for economic freedom dropped slightly this year as many countries scrambled to deal with recession. However, it's important they take the correct steps.
"The 2010 Index provides strong evidence that economic freedom has far-reaching positive impacts on various aspects of human development," the editors write. "Economic freedom correlates with poverty reduction, a variety of desirable social indicators, democratic governance, and environmental sustainability."
Of the 179 countries ranked 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--113 economies--were found to be either "moderately free" (60-60.9) or "mostly unfree" (50-50.9). The remaining 36 countries have "repressed" economies, with total freedom scores below 50.
The 2010 Index was edited by Ambassador Terry Miller, Director of Heritage's Center for International Trade and Economics, and Dr. Kim Holmes, Heritage's Vice President for foreign affairs. Copies of the 2010 Index (TK pp., US$ TK) can be ordered at heritage.org/index or by calling 1-800-975-8625. Additionally the full text, charts and graphs, is available via the Internet at www.heritage.org/index.
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