January 20, 2010

January 20, 2010 | News Releases on Index of Economic Freedom

Economic Freedom in Europe Again Tops World Average, Index Finds

WASHINGTON, JAN. 10, 2010 - Economic freedom increased in 24 small but reform-minded European economies last year, according to the 2010 "Index of Economic Freedom," an analysis published annually by The Wall Street Journal and The Heritage Foundation.

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.

About The Wall Street Journal

Founded in 1889, The Wall Street Journal, the flagship publication of Dow Jones & Company is the world's leading business publication and holds 33 Pulitzer Prizes for outstanding journalism. 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. The Wall Street Journal boasts the largest individually paid circulation out of the top 25 U.S. newspapers. 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 leading provider of business and financial news and analysis on the Web with more than one million subscribers and 26 million users per month. WSJ.com is the flagship site of The Wall Street Journal Digital Network, which also includes MarketWatch.com, Barrons.com, AllThingsD.com and FINS.com. In 2009, the Journal was ranked No. 1 in BtoB's Media Power 50 for the 10th consecutive year. The Wall Street Journal Radio Network services news and information to more than 350 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 582,000 individual, foundation and corporate donors. Founded in 1973, Heritage now has a staff of 244 and an expense budget of $61 million.

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Related Issues: Index of Economic Freedom