Not Government Spending,
Provides Path to Prosperity
North Africa and North America —
North America experienced the sharp-est drop—a 1.3-point loss. All three
countries in the region — the United
States, Canada and Mexico— showed
Hong Kong and Singapore Top Index; United States
Falls to 10th; Countries Trying to Spend Their
Way Out of Recession Failed, Data Shows
WASHINGTON — Economic freedom declined worldwide in 2011 as
many countries attempted — without
success — to spend their way out of
recession, according to the 18th annual
Index of Economic Freedom, released
today by The Heritage Foundation
and The Wall Street Journal.
4. New Zealand
10. United States
In Europe, 80 percent of the 43 coun-
tries studied are “mostly free” or “mod-
erately free.” Only two, Belarus and
Ukraine, are “repressed.” Nine of the
top 20 are European countries but all
nine lost economic freedom compared
with the previous year.
The sovereign debt crisis in Europe
threatens growth, the editors note, but
for now it serves the valuable purpose
of forcing leaders to make tough decisions on spending.
The average economic freedom score
for the 2012 Index stands at 59.5 (on a
scale in which 100 represents the ideal), down two-tenths of a point from
“The mounting burden of reckless government spending has overwhelmed gains in economic freedom
in other policy areas,” write the Index
editors. “Tension between government control and the free market has
heightened around the world, particularly in developed countries.”
Hong Kong and Singapore finished
first and second in the rankings for
the 18th straight year. Australia and
New Zealand ranked third and fourth,
and Switzerland fifth. Canada finished
sixth, slipping almost a full point and
falling out of the group of “free” economies into the “mostly free” category.
Chile took seventh place and moved
almost a full point toward greater
economic freedom. Mauritius was
eighth with an overall score of 77 and
became the first Sub-Saharan country to rank among the top 10. Ireland
finished ninth to best the United
States, which dropped to tenth.
The Most Free
1. Hong Kong
The Least Free
170. Equatorial Guinea
172. D.R. of Congo
179. North Korea
Greece’s Index score declined the most,
plunging nearly five points to 55.4.
This put it in the middle of the pack
of “mostly unfree” economies. Many
of Greece’s European neighbors also
suffered from exploding government
budgets; 37 of the 43 European coun-
tries ranked in the Index lost ground
in the spending category.
Zimbabwe finished next to last among
the 179 countries rated but showed the
biggest gains in economic freedom. Its
score jumped 4. 2 points to move within two points of Cuba at 26.3. Guinea-Bissau jumped 3. 6 points, and Iceland
improved by 2. 7 points.
The Index also studies economic free-
dom on a regional basis. In 2011,
only the Sub-Saharan Africa and Asia-
Pacific regions advanced. The other
regions — South and Central Amer-
ica/Caribbean, Europe, Middle-East
In Latin America, Chile ranks seventh
in the world and first in the region, the
fruit of low spending levels and inno-
vative fiscal policies. Guyana was the
biggest gainer, up 1. 9 points and mov-
ing into the “mostly free” category.
Cuba is at the back of the pack and
third from the bottom in the world.
Venezuela, Bolivia, Ecuador and
Dominica, all heavily influenced by
Cuba, performed poorly.
Overall, the region continues to suffer
from corruption and weak property
rights, both owing to a weak tradition
of rule of law.
The Asia-Pacific region dominates
both the top and the bottom of the
rankings. Hong Kong, Singapore,
Australia and New Zealand finished
1-2- 3-4 respectively worldwide. North
Korea is ranked last in the world and
Burma, the Solomon Islands, Uzbeki-stan, Turkmenistan and Timor-Leste
all rank 160th or worse.
Sub-Saharan Africa is the Index’s
good news/bad news story. The bad
news: The region continues to lag behind all others in seven of the 10 measures that make up the Index. The
good news: For the second straight
year, Sub-Saharan Africa is the most
improved region. On net, 22 countries moved in a positive direction,