The 2011 Economic Freedom Index: Emerging Countries Improve, U.S. Slips

by: Bob McTeer

The good news in the 2011 Index of Economic Freedom, compiled by the Heritage Foundation and the Wall Street Journal, is improvement in economic freedom in the 183 countries surveyed. The bad news is that the United States slipped from 7th to 9th place. The average score improved from an index number (100 is best) of 59.4 to 59.7. The U.S. score declined slightly from 78.0 to 77.8. 117 countries were judged to be freer while 58 lost ground. Much of the improvement came in developing and emerging economies. The slippage in the U.S. is largely because of policies taken to counter the financial crisis and recession.

(Fortunately the researchers didn’t find out about my community association, which the principal inhibitor of freedom of my neighbors and me. It would have lowered the 85 score in the property rights category below, but that topic deserves a separate post if I weren’t afraid of being booted out of the neighborhood.)

I’ve always been fascinated with the criteria used to measure economic freedom. This year they are grouped into the following 10 broad categories with the U.S. score for each category:

Business Freedom 90.1

Investment Freedom 75.0

Trade Freedom 86.4

Financial Freedom 70.0

Fiscal Freedom 68.3

Property Rights 85.0

Government Spending 54.6

Freedom from Corruption 75.0

Monetary Freedom 77.4

Labor Freedom 95.7

Overall U.S. score 77.8

The top 10 Countries, their overall scores, and changes from last year are as follows:

Hong Kong 89.7 0.0

Singapore 87.2 +1.1

Australia 82.5 -0.1

New Zealand 82.3 +0.2

Switzerland 81.9 +0.8

Canada 80.8 +0.4

Ireland 78.7 -2.6

Denmark 78.6 +0.7

United States 77.8 -0.2

Bahrain 77.7 +1.4