2022 Index of Economic Freedom: Biden’s Economy Drags US to All-Time Low Ranking; Taiwan Earns First “Free” Rating; Economic Freedom Declines Worldwide

2022 Index of Economic Freedom: Biden’s Economy Drags US to All-Time Low Ranking; Taiwan Earns First “Free” Rating; Economic Freedom Declines Worldwide

Feb 14, 2022 6 min read

WASHINGTON—Economic freedom is in growing peril in the United States and abroad, according to The Heritage Foundation’s “2022 Index of Economic Freedom,” released Monday. 

This year's index reveals a global economy that, taken as a whole, remains “moderately free.” However, the global average economic freedom score is now 60—a loss of 1.6 points from the 2021 Index’s score of 61.6. 

“No other system—and many have been tried—comes close to the record of free-market capitalism in promoting growth and empowering human flourishing. The undeniable link between economic freedom and prosperity is a striking demonstration of what people can do when they have maximum opportunity to pursue their own interests within the rule of law. However, as we are currently seeing around the globe, that freedom is never guaranteed, and can vanish in a heartbeat,” said the Index’s authors Terry Miller, Anthony Kim, James Roberts, and Patrick Tyrrell.  

Americans are already feeling the pain of decreased economic freedom at home. In just the first year of the Biden administration, the president’s reckless and destructive economic agenda caused the United States to record a score of 72.1, a drop of 2.7 points from its 2021 score.  

The U.S. also fell from 20th to 25th in the 2022 global rankings—its lowest ranking ever. Despite being driven lower by a sharp decrease in its fiscal health score, the Biden administration is still barreling full steam ahead to implement a socialist agenda that would add trillions to the debt, hike taxes, and centralize more federal power over the economy. Meanwhile, Americans are suffering from record inflation and supply chain disruptions.  

The Index editors lay the blame for declining economic freedom around the world on one major factor—unwise policies addressing the COVID-19 pandemic.  

“Most every economy included in the 2022 Index experienced negative growth in 2020, which is not surprising given that so many of the actions that governments have taken in the name of protecting public health have also reduced economic freedom. These restrictions have exacted a cost in terms of human well-being that must be added to the enormous cost of the death toll from the disease itself,” said the editors.  

Singapore maintained its status as the world’s freest economy, but the top 10 countries saw substantial reshuffling. Amidst sustained severe lockdowns, Australia dropped out of the “free” category for the first time since 2006, and New Zealand dropped to fourth place, behind Switzerland and Ireland.  

There were several countries that made positive gains in the Index, including Taiwan, Luxembourg, and Estonia, which all jumped in the rankings to join the “free” category for the first time.  

Economic freedom remained almost non-existent in authoritarian China. Increased intervention and aggression in Hong Kong, threats against Taiwan, the persecution of the Uyghurs and other religious groups, and Beijing’s malicious cyber activities have led to a broad decline in trust and continue to destabilize global relationships.  

Heritage made global headlines in 2021 when it removed perennially top-ranking Hong Kong from the Index, due to increasing influence and interference by the Chinese Communist Party. Hong Kong was again not ranked in the 2022 Index, as Heritage determined it did not have full sovereign control over its economic policies.  

Dr. Kevin Roberts, president of The Heritage Foundation, said of the Index: 

“This year’s ‘Index of Economic Freedom’ paints a disturbing picture, both at home and abroad. The decline of American economic freedom is serious cause for alarm, and has  real and tangible consequences for all Americans, especially low-income families and the working class. Since early 2020, when the Chinese Communist Party unleashed the COVID-19 pandemic on the world, we have dealt with one of the greatest political, social, and economic upheavals of the past century. The lives and livelihoods of hundreds of millions of people have been deeply disrupted not just by the virus, but especially by draconian lockdowns, intrusive public health mandates and restrictions on commerce and trade. Trillions of dollars in new federal spending have further weakened our economy and caused a historic spike in inflation.    

 

“We have an opportunity to speak to the very real concerns of Americans struggling in an economy where they are increasingly losing not just their freedom, but evermore of their hard-earned savings. It’s time for the U.S. government to get its fiscal house in order,  unleash freedom here at home, and help Americans flourish once again through self-governance.”  

Top 10 Most-Free Nations: 

1. Singapore 

2. Switzerland

3. Ireland 

4. New Zealand 

5. Luxembourg 

6. Taiwan  

7. Estonia 

8. Netherlands 

9. Finland 

10. Denmark 

Bottom 10 Least-Free Nations:  

168. Central African Republic 

169. Bolivia 

170. Iran 

171. Eritrea 

172. Burundi 

173. Zimbabwe 

174. Sudan 

175. Cuba 

176. Venezuela 

177. North Korea 

Launched in 1995, the Index evaluates countries in four broad policy areas that affect economic freedom: rule of law; government size; regulatory efficiency; and open markets. There are 12 specific categories: property rights, judicial effectiveness, government integrity, tax burden, government spending, fiscal health, business freedom, labor freedom, monetary freedom, trade freedom, investment freedom, and financial freedom. Scores in these categories are averaged to create an overall economic freedom score. 

As the nation’s largest, most broadly supported conservative research and educational institution, The Heritage Foundation has been leading the American conservative movement since our founding in 1973. More than 500,000 members support our vision to build an America where freedom, prosperity, opportunity, and civil society flourish. 

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