2020 Index of Economic Freedom

Dominican Republic

OVERALL SCORE60.9
WORLD RANK95
Rule of Law

Property Rights55.8

Judicial Effectiveness18.2

Government Integrity31.2

Government Size

Tax Burden84.5

Government Spending90.5

Fiscal Health82.4

Regulatory Efficiency

Business Freedom50.3

Labor Freedom57.5

Monetary Freedom73.5

Open Markets

Trade Freedom76.6

Investment Freedom70.0

Financial Freedom40.0

Create a Comparison Chart

See how Dominican Republic compares to another country using any of the measures in the Index.

vs
Close
Download PDF
Quick Facts
  • Population:
    • 10.3 million
  • GDP (PPP):
    • $189.2 billion
    • 7.0% growth
    • 6.6% 5-year compound annual growth
    • $18,425 per capita
  • Unemployment:
    • 5.8%
  • Inflation (CPI):
    • 3.6%
  • FDI Inflow:
    • $2.5 billion

The Dominican Republic’s economic freedom score is 60.9, making its economy the 95th freest in the 2020 Index. Its overall score has decreased by 0.1 point, primarily because of a drop in the fiscal health score. The Dominican Republic is ranked 19th among 32 countries in the Americas region, and its overall score is approximately equal to the regional and world averages.

Economic freedom has stagnated in the Dominican Republic over the past five years, with the economy stuck at the bottom of the moderately free category. GDP growth over the same period has surged, however, as growth in construction, tourism, and free-trade zones has caused the service sector to surpass agriculture as the largest source of employment.

For the economy to gain more freedom, the government must improve such institutions as the judiciary and otherwise strengthen the rule of law by, for example, streamlining complex and slow administrative procedures that increase opportunities for corruption.

Close

Background

The Dominican Republic occupies the more verdant and arable eastern two-thirds of the island of Hispaniola. President Danilo Medina of the long-ruling Dominican Liberation Party (PLD) won a second four-year term in 2016, and the PLD is likely to be well-positioned to remain in power after the May 2020 election. The PLD’s dominance of government contributes to political stability but also risks undermining checks and balances, fueling corruption, and weakening the country’s multiparty democracy. Long viewed primarily as an exporter of sugar, coffee, and tobacco, the economy has been the Caribbean’s most vibrant in recent years, driven by mining activity and strong growth in such service-based sectors as tourism and finance.

Rule of LawView Methodology

Property Rights 55.8 Create a Graph using this measurement

Judicial Effectiveness 18.2 Create a Graph using this measurement

Government Integrity 31.2 Create a Graph using this measurement

To promote the titling of real property, the government has developed a cadaster with digitized property titles and has expanded the number of land registry offices. Economic insecurity is driven by government expropriation, institutional weaknesses, inconsistent and nontransparent courts, and inadequate law enforcement. Corruption is a serious systemic problem at all levels of the government, judiciary, and security forces and in the private sector.

Government SizeView Methodology

The top individual income tax rate is 25 percent, and the top corporate tax rate is 27 percent. Other taxes include value-added, estate, and net wealth taxes. The overall tax burden equals 13.9 percent of total domestic income. Government spending has amounted to 17.8 percent of the country’s output (GDP) over the past three years, and budget deficits have averaged 3.0 percent of GDP. Public debt is equivalent to 41.6 percent of GDP.

Regulatory EfficiencyView Methodology

Protections for minority investors were recently strengthened, but businesses frequently complain about requests for bribes, bureaucratic delays, weak intellectual property rights, sometimes biased judicial and administrative processes, and delayed government payments. About half of the labor force works in the informal sector. Reforms in the electricity sector, long a drag on public finances and competitiveness, were delayed again in 2019.

Open MarketsView Methodology

The total value of exports and imports of goods and services equals 55.0 percent of GDP. The average applied tariff rate is 4.2 percent, and 89 nontariff measures are in force. In general, government policies do not interfere significantly with foreign investment. The small financial sector remains relatively stable and continues to evolve. The underdeveloped and state-controlled banking sector limits access to credit.

Country's Score Over Time

View Chart of Scores over Time

Regional Ranking

RANK COUNTRY OVERALL CHANGE
1Canada78.20.5
2Chile76.81.4
3United States76.6-0.2
4Colombia69.21.9
5Uruguay 69.10.5
6Jamaica 68.5-0.1
7Saint Lucia68.2-0.5
8Peru67.90.1
9Panama 67.20.0
10Saint Vincent and the Grenadines66.81.0
11Mexico661.3
12Costa Rica 65.80.5
13The Bahamas64.51.6
14Guatemala 641.4
15Paraguay 631.2
16El Salvador 61.6-0.2
17Barbados61.4-3.3
18Honduras 61.10.9
19Dominican Republic60.9-0.1
20Dominica60.8-2.8
21Trinidad and Tobago58.31.3
22Belize57.42.0
23Nicaragua 57.2-0.5
24Guyana56.2-0.6
25Brazil53.71.8
26Argentina53.10.9
27Haiti52.3-0.4
28Ecuador51.34.4
29Suriname49.51.4
30Bolivia42.80.5
31Cuba26.9-0.9
32Venezuela 25.2-0.7
See Entire Region List ›

View all countries ›

Back to Top