executive highlights

8/12/2019 Executive Highlights

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Executive Highlights

Global economic freedom has declined

over the past year according to the 2012

Index of Economic Freedom. The tension

between government control and the free market

has heightened around the world, particularly in

developed countries. Eroding hard-earned gains

in economic freedom in years past, the mount-

ing burden of reckless government spending in

many cases has overwhelmed gains in economic

freedom achieved in other policy areas.

The 2012 Index, the 18th edition, analyzes

economic policy developments in 184 countries

since the second half of 2010. Somalia, though

not formally graded, returns to theIndexfor the

first time since the 2001 Index. Countries are

graded and ranked on 10 measures of economic

freedom that evaluate the rule of law, the intru-siveness of government, regulatory efficiency,

and the openness of markets.

HIGHLIGHTS FROM THE 2012 INDEX

Rapid expansion of government, more

than any market factor, appears to be respon-

sible for flagging economic dynamism.Gov-

ernment spending has not only failed to arrest

the economic crisis, but alsoin many countries

seems to be prolonging it. The big-governmentapproach has led to bloated public debt, turning

an economic slowdown into a fiscal crisis with

economic stagnation fueling long-term unem-

ployment. For governments that increasingly are

constrained by budget deficits and rising debt, the

disconnect between past promises and the capa-

bility to fulfill them, and between financial assets

and liabilities, has become difficult to ignore. A

fundamental rethinking of the social contract,

the basic and proper relationship between gov-

ernment and citizen, has become not just an aca-

demic exercise, but a political debate that in some

countries has spilled into the streets.

The steady progress in global economic

freedom documented by the Index until

2008 has not resumed.The global average eco-

nomic freedom score in the 2012Indexis 59.5, a

0.2 point decline from last year and matching

the second lowest level in the past 10 years. (SeeChart 1.) Renewed economic uncertainty and

stagnation caused by the sovereign debt turmoil

in some key developed economies have battered

world economic progress. Unquestionably, the

policy choices made at this juncturewhich

involve the overriding question of whether there

will be more freedom or lesswill be vital in

determining levels of future prosperity.

Chile and Mauritius advanced into the

top 10 in the rankings in the 2012 Index,reflecting notable advances in their econom-

ic freedom scores.Chile is returning to the top


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2 2012 Index of Economic Freedom

10, where it last appeared in 2010. For Mauritius,

it is the first time in the top 10 and the first time

ever that a Sub-Saharan African country has

been so highly ranked. Ireland and the U.S. lost

ground, slipping to the 9th and the 10th spots,

respectively. Despite its high regulatory effi-

ciency and strong rule of law, Denmark fell outof the top 10 altogether because of huge govern-

ment spending equivalent to almost 60 percent

of total domestic output and a high correspond-

ing tax burden. Bahrain dropped from the top

10 as a result of worsening scores for corruption,

property rights, and government spending.

Every region continues to be represented

by at least one of the top 20 freest economies.

Nine of these elite economies are in Europe, led

by Switzerland, Ireland, and Denmark. Six arein the AsiaPacific region. Replacing Japan, Tai-

wan has joined the top 20 as the worlds 18th

freest economy. Canada and the U.S. represent

North America. The other regions are repre-

sented by one country each: Chile (South and

Central America/Caribbean region); Mauritius

(Sub-Saharan Africa region); and Bahrain (Mid-

dle East and North Africa region).

The scores of 75 economies improved, but

90 countries lost economic freedom, and 14

showed no change.Of the 75 economies whose

scores improved, 73 are considered developing

or emerging countries. Many are in the Asia

Pacific, Sub-Saharan Africa, and South and Cen-

tral America/Caribbean regions. Australia and

Iceland are the only two developed countries

that recorded score improvements in the 2012

Index, partly due to their efforts to bring govern-

ment spending under control.Economic freedom continued to advance

in the Sub-Saharan Africa and AsiaPacific

regions. Led by GuineaBissau, Rwanda, Libe-

ria, and Zimbabwe, Sub-Saharan African had the

largest gains on average in theIndex. In the Asia

Pacific region, Mongolia, Kazakhstan, and Tai-

wan led the way in enhancing economic freedom.

Four AsiaPacific economies and Swit-

zerland earned designation as truly free

economies for the 2012Index.Each achieveda score above 80 on the grading scale. Hong Kong

successfully defended its status as the worlds

freest economy for a remarkable 18th year in a

row. Singapore remains the worlds second fre-

est economy and closed the gap with Hong Kong

a bit as a result of advances in financial freedom.

Australia, New Zealand, and Switzerland main-

tained their previous standings of 3rd, 4th, and5th, respectively. These five free economies rel-

ative strength is no accident. Their continuing

commitment to rule of law, limited government,

regulatory efficiency, and open markets has been

the source of impressive resilience during uncer-

tain economic times.

GREATER ECONOMIC FREEDOM:

THE IMPERATIVE FOR GROWTH

AND PROGRESSThe overarching objective of economic poli-

cies must be to create an environment that pro-

Sources: Terry Miller, Kim R. Holmes, and Edwin J.Feulner, 2012 Index of Economic Freedom(Washington,D.C.: The Heritage Foundation and Dow Jones &Company, Inc., 2012), at www.heritage.org/index.

Chart 1 heritage.org

Global Economic Freedom

1995 2000 2005 2010 2012

56

57

58

59

60

61

2008:

60.2

Average Score in the Index of EconomicFreedom Since 1995

2011:59.72011:59.7

1996:57.1

1996:57.1

2012:59.5

2012:59.5


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Executive Highlights 3

vides the best chance for sustained economic

growth, rising incomes, and improvements in

overall well-being. The broad consensus, sup-

ported by volumes of research, is that vibrant

and lasting economic growth is achievable

only when governments adopt economic

policies that increase individual choice andopportunity, empowering and encouraging

entrepreneurship.

TheIndex results, when compared with data

about changes in economic and social condi-

tions in societies around the world, provide

strong empirical evidence that the free-market

system remains not only viablewith the value

of its core features such as private property

rights, openness, and flexibility almost unques-tionedbut uniquely able to promote economic

dynamism and long-term prosperity.

$0

20 40 60 80 100

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

Overall Score in the 2012 Index of Economic Freedom

GDP per Capita (Purchasing Power Parity)

Each dot represents a nation inthe Index of Economic Freedom

Correlation = 0.65R2= 0.42

Tren

dLin

e

Sources: Terry Miller, Kim R. Holmes, and Edwin J. Feulner, 2012 Index of Economic Freedom(Washington, D.C.: TheHeritage Foundation and Dow Jones & Company, Inc., 2012), at www.heritage.org/index; World Bank Group, WorldDevelopment Indicators Online, at http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/0,,menuPK:476823~pagePK:64165236~piPK:64165141~theSitePK:469372,00.html (November 4, 2011); and International Monetary Fund, WorldEconomic Outlook Databases, at http://www.imf.org/external/ns/cs.aspx?id=28(November 4, 2011).


Economic Freedom Promotes Prosperity


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The positive relationship between economic

freedom and prosperity has been confirmed yet

again in the 2012Index. GDP per capita is much

higher in countries with greater economic free-

dom. Chart 2 shows a strong positive relation-

ship between the level of economic freedom and

GDP per capita.While much of the world has pro gressed

toward greater economic freedom and higher

prosperity in recent decades, a significant pro-

portion of the worlds population lives in coun-

tries where economic freedom and opportunity

are restrained. As seen in Chart 3, almost three-

quarters of the worlds people live in countries

that are mostly unfree or repressed (eco-

nomic freedom scores of less than 60). Much ofthat 75 percent comes from just two countries,

India and China.

$100,000

$10,000

$1,000

$100

20 30 40 50 60 70 80 90 100

Sources: Terry Miller, Kim R. Holmes, and Edwin J. Feulner, 2012 Index of Economic Freedom(Washington, D.C.: TheHeritage Foundation and Dow Jones & Company, Inc., 2012), at www.heritage.org/index; World Bank Group, WorldDevelopment Indicators Online, at http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/0,,menuPK:476823~pagePK:64165236~piPK:64165141~theSitePK:469372,00.html (November 4, 2011); and International Monetary Fund, WorldEconomic Outlook Databases, at http://www.imf.org/external/ns/cs.aspx?id=28(November 4, 2011).


Large Numbers of People Are Denied Economic Freedom

GDP per Capita (Purchasing Power Parity)

Overall Score in the 2012 Index of Economic Freedom

Each circle represents a nation inthe Index of Economic Freedom

Population


Tren

dLine 1 billion

500 million

250 million

100 million

10 million60 or less: Mostly

Unfree or Repressed

China

India


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Higher economic freedom is strongly cor-

related with successful elimination of poverty.

Chart 4 shows that poverty intensity, as mea-

sured by the United Nations new Multidimen-

sional Poverty Index that assesses the nature

and intensity of poverty at the individual level ineducation, health outcomes, and standard of liv-

ing, is much lower on average in countries with

greater economic freedom.

Advancing economic freedom is vital to lift-

ing people to greater prosperity. Not only is a

higher level of economic freedom clearly associ-

ated with a higher level of per capita income, but

countries improvements in economic freedom

also increase their income growth rates, speed-

ing economic and social progress. (See Chart 5.)Chart 6 illustrates the impressive progress of

Mauritius, the first Sub-Saharan African country

to rank in theIndexs top 10. For comparison, its

changes in GDP growth and economic freedom

are contrasted with those of the United King-

dom, from which Mauritius became indepen-

dent in 1968.

Economic freedom is highly correlated with

entrepreneurial activity that creates new jobs

and increases opportunities and choices for indi-viduals in advancing their own well-being. (See

Chart 7.)

0

0.05

0.10

0.15

0.20

0.25

Mostly Free andModerately Free

Mostly Unfreeand Repressed

0.08

Sources: Terry Miller, Kim R. Holmes, and Edwin J.Feulner, 2012 Index of Economic Freedom(Washington,D.C.: The Heritage Foundation and Dow Jones &Company, Inc., 2012), at www.heritage.org/index, andUnited Nations, Human Development Report 2011,Multidimensional Poverty Index, athttp://hdr.undp.org/en/reports/global/hdr2011/

(November 4, 2011).


Economic Freedom and Poverty

Poverty Intensity

Categories in the 2012 Index ofEconomic Freedom

0.240.24

1stQuintile

2ndQuintile

3rdQuintile

4thQuintile

5thQuintile

3.7%

2.9%2.8%

2.3%

2.1%

Nations in the 2012 Index ofEconomic Freedom

Improvement in Economic Freedom Scores

Most Least

Sources: Terry Miller, Kim R. Holmes, and Edwin J.Feulner, 2012 Index of Economic Freedom(Washington,D.C.: The Heritage Foundation and Dow Jones &Company, Inc., 2012), at www.heritage.org/index;World Bank Group, World Development IndicatorsOnline, at http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/0,,menuPK:476823~pagePK:64165236~piPK:64165141~theSitePK:469372,00.html(November 4, 2011); and International MonetaryFund, World Economic Outlook Databases, athttp://www.imf.org/external/ns/cs.aspx?id=28(November 4, 2011).


Economic Freedom and

Economic Growth

Ten-Year Growth Rate inPer-Capita Income


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The proven path to revitalizing economic

growth is to advance economic freedom by pro-

moting policies that generate a virtuous cycle of

innovation, job creation, productivity growth,

and higher living standards that in turn helps to

create the social and economic resilience that

sustains and empowers individuals in a rapidly

evolving economic environment. As shown inChart 8, economic freedom is positively linked

to innovation.

The need to improve, or in some cases restore,

economic freedom is stronger than ever. The

challenge is to preserve past gains in economic

freedom and to ensure that reform agendas

focus on generating greater economic freedom,

not less.

With global economic recovery far from

secure, many countries are at a critical juncture,Policy decisions will be difficult, and the pres-

sure for government intervention to favor polit-

ically powerful interests can be severe. Trade

freedom and financial freedom are particularly

threatened around the world, and the push for

ever greater regulation in fields such as resource

usage or labor relations is unabated.

The fundamental principles emphasized in

theIndex of Economic Freedomthe empower-ment of individuals, equitable treatment for all,

and the promotion of competitioncan provide

a good guide. Policies can be judged on whether

they reinvigorate entrepreneurial dynamism

or perpetuate static patterns of production and

employment, whether they promote openness

or protectionism.

Ultimately, the choice is a simple one: for or

against economic freedom itself. TheIndexpro-

vides powerful evidence that the path to greaterfreedom is also the path to greater prosperity.

1997 2000 2005 2010

90

100

110

120

130

140

150

160

Growth of GDP per Capita (1997=100)

Mauritius

U.K.

1999 2000 2005 2010 2012

60

65

70

75

80

85

Index of Economic FreedomScore

Mauritius

U.K.

Sources: Terry Miller, Kim R. Holmes, and Edwin J. Feulner, 2012 Index of Economic Freedom(Washington, D.C.: TheHeritage Foundation and Dow Jones & Company, Inc., 2012), at www.heritage.org/index, and World Bank Group, WorldDevelopment Indicators Online, at http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/0,,menuPK:476823~pagePK:64165236~piPK:64165141~theSitePK:469372,00.html (November 4, 2011).


Comparing Mauritius and the United Kingdom

154

120

74.1

77.0

154

120

74.1

77.0


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1

20

40

60

80

100

120

120406080100120140160180

Each dot represents a nation in theIndex of Economic Freedom


Tren

d

Line

Sources: Terry Miller, Kim R. Holmes, and Edwin J.Feulner, 2012 Index of Economic Freedom(Washington,D.C.: The Heritage Foundation and Dow Jones &Company, Inc., 2012), at www.heritage.org/index, and2011 Legatum Prosperity Index, at http://www.prosperity.com/rankings.aspx(November 4, 2011).


Economic Freedom PropelsEntrepreneurial Dynamism

Rank in the Entrepreneurship

and Opportunity Sub-Index

Rank in the 2012 Indexof Economic Freedom

75

60

45

30

15

0

20 40 60 80 100

Overall Score in the 2012 Indexof Economic Freedom

Innovation Capacity

Each dot represents a nation in the Index ofEconomic Freedom


Trend

Line

Sources: Terry Miller, Kim R. Holmes, and Edwin J.Feulner, 2012 Index of Economic Freedom(Washington,D.C.: The Heritage Foundation and Dow Jones &Company, Inc., 2012), at www.heritage.org/index, and

INSEAD eLab, The Global Innovation Index 2011, athttp://www.globalinnovationindex.org/gii/main/fullreport/index.html(November 4, 2011)


Economic Freedom and Innovation


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2012Index of Economic FreedomWorld Rankings

WorldRank

Country Overa

llScore

Changefrom2011

Prope

rtyRights

Freed

omfromCorruption

FiscalFreedom

GovernmentSpending

Busin

essFreedom

LaborFreedom

Mone

taryFreedom

Trade

Freedom

InvestmentFreedom

FinancialFreedom

1 Hong Kong 89.9 0.2 90.0 84.0 93.1 91.0 98.9 86.5 85.8 90.0 90.0 90.0

2 Singapore 87.5 0.3 90.0 93.0 91.3 91.3 97.2 92.1 84.8 90.0 75.0 70.0

3 Australia 83.1 0.6 90.0 87.0 63.4 67.1 91.9 90.6 84.5 86.2 80.0 90.0

4 New Zealand 82.1 -0.2 95.0 93.0 71.6 45.0 99.9 89.9 85.2 86.8 75.0 80.0

5 Switzerland 81.1 -0.8 90.0 87.0 67.9 65.8 77.9 87.9 84.4 90.0 80.0 80.0

6 Canada 79.9 -0.9 90.0 89.0 79.2 41.7 96.6 81.8 77.3 87.9 75.0 80.0

7 Chile 78.3 0.9 90.0 72.0 77.4 82.1 68.6 75.1 85.6 82.0 80.0 70.0

8 Mauritius 77.0 0.8 65.0 54.0 91.9 83.4 78.7 70.4 78.3 87.9 90.0 70.0

9 Ireland 76.9 -1.8 90.0 80.0 73.9 30.4 92.8 78.4 76.7 87.1 90.0 70.0

10 United States 76.3 -1.5 85.0 71.0 69.8 46.7 91.1 95.8 77.2 86.4 70.0 70.0

11 Denmark 76.2 -2.4 90.0 93.0 39.8 0.0 99.1 92.1 80.7 87.1 90.0 90.0

12 Bahrain 75.2 -2.5 55.0 49.0 99.9 72.2 76.5 91.1 70.4 82.8 75.0 80.0

13 Luxembourg 74.5 -1.7 90.0 85.0 63.6 46.6 75.9 40.9 81.3 87.1 95.0 80.0

14 United Kingdom 74.1 -0.4 90.0 76.0 56.4 21.5 94.7 71.5 73.9 87.1 90.0 80.0

15 The Netherlands 73.3 -1.4 90.0 88.0 51.2 20.9 81.9 60.0 83.6 87.1 90.0 80.0

16 Estonia 73.2 -2.0 80.0 65.0 79.1 38.8 75.7 56.9 79.3 87.1 90.0 80.0

17 Finland 72.3 -1.7 90.0 92.0 65.4 5.2 94.9 42.4 81.3 87.1 85.0 80.0

18 Taiwan 71.9 1.1 70.0 58.0 80.4 92.3 88.5 46.6 83.1 85.0 65.0 50.0

19 Macau 71.8 -1.3 60.0 50.0 75.8 88.1 60.0 55.0 84.2 90.0 85.0 70.0

20 Cyprus 71.8 -1.5 70.0 63.0 83.3 37.1 81.6 69.9 85.7 82.1 75.0 70.0

21 Sweden 71.7 -0.2 90.0 92.0 39.1 8.8 94.6 54.6 80.9 87.1 90.0 80.0

22 Japan 71.6 -1.2 80.0 78.0 67.1 47.0 81.8 81.4 88.9 81.8 60.0 50.0

23 Lithuania 71.5 0.2 60.0 50.0 93.6 41.7 79.2 64.6 79.3 87.1 80.0 80.0

24 Saint Lucia 71.3 0.5 70.0 70.0 74.1 67.7 84.7 83.5 85.8 71.9 65.0 40.0

25 Qatar 71.3 0.8 70.0 77.0 99.7 73.6 69.7 67.9 77.1 82.5 45.0 50.0

26 Germany 71.0 -0.8 90.0 79.0 61.3 32.2 90.5 41.4 83.5 87.1 85.0 60.0

27 Iceland 70.9 2.7 90.0 85.0 73.5 21.8 92.0 60.9 72.5 88.2 65.0 60.0

28 Austria 70.3 -1.6 90.0 79.0 50.5 15.4 70.3 78.1 82.2 87.2 80.0 70.0

29 Uruguay 69.9 -0.1 70.0 69.0 81.2 68.7 74.9 74.0 73.4 82.9 75.0 30.0

30 Czech Republic 69.9 -0.5 70.0 46.0 82.0 36.8 67.7 77.9 81.5 87.1 70.0 80.0

31 South Korea 69.9 0.1 70.0 54.0 72.8 67.2 93.6 49.7 78.9 72.6 70.0 70.0

32 Jordan 69.9 1.0 55.0 47.0 93.5 67.0 69.5 75.7 81.2 79.6 70.0 60.0

33 Botswana 69.6 0.8 70.0 58.0 78.3 53.7 69.1 70.2 72.4 79.7 75.0 70.0

34 Georgia 69.4 -1.0 40.0 38.0 87.8 55.8 86.9 92.1 74.4 89.2 70.0 60.0

35 United Arab Emirates 69.3 1.5 55.0 63.0 99.9 80.1 68.0 78.8 80.9 82.6 35.0 50.0

36 Spain 69.1 -1.1 70.0 61.0 61.3 37.1 81.3 51.8 81.5 87.1 80.0 80.0

37 Barbados 69.0 0.5 80.0 78.0 71.1 40.1 90.0 80.0 75.8 60.5 55.0 60.0


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WorldRank

Country Overa

llScore

Changefrom2011

Prope

rtyRights

Freed

omfromCorruption

FiscalFreedom

GovernmentSpending

Busin

essFreedom

LaborFreedom

Mone

taryFreedom

Trade

Freedom

InvestmentFreedom

FinancialFreedom


38 Belgium 69.0 -1.2 80.0 71.0 44.8 12.1 92.3 71.3 81.2 87.1 80.0 70.0

39 Armenia 68.8 -0.9 30.0 26.0 89.3 74.9 87.8 76.6 73.1 85.4 75.0 70.0

40 Norway 68.8 -1.5 90.0 86.0 52.5 35.3 88.4 46.3 75.1 89.3 65.0 60.0

41 El Salvador 68.7 -0.1 40.0 36.0 85.5 91.1 63.2 65.3 82.1 79.0 75.0 70.0

42 Peru 68.7 0.1 40.0 35.0 79.7 90.9 72.0 68.5 85.5 85.0 70.0 60.0

43 Macedonia 68.5 2.5 35.0 41.0 91.2 66.7 80.9 80.3 86.1 83.6 60.0 60.0

44 Costa Rica 68.0 0.7 55.0 53.0 82.8 90.8 57.6 62.7 73.4 85.1 70.0 50.0

45 Colombia 68.0 0.0 50.0 35.0 76.0 74.1 89.4 79.7 78.7 72.2 65.0 60.0

46 The Bahamas 68.0 0.0 70.0 55.0 97.7 85.2 70.9 82.7 76.0 42.2 30.0 70.0

47 Oman 67.9 -1.9 50.0 53.0 98.4 53.6 68.2 85.1 72.1 83.7 55.0 60.0

48 Israel 67.8 -0.7 70.0 61.0 64.1 41.0 64.4 65.1 79.0 83.6 80.0 70.0

49 Hungary 67.1 0.5 70.0 47.0 78.6 24.4 79.8 67.6 76.1 87.1 70.0 70.0

50 Malta 67.0 1.3 70.0 56.0 67.8 43.8 70.0 60.0 80.5 87.1 75.0 60.0

51 Slovakia 67.0 -2.5 50.0 43.0 84.2 48.2 71.0 58.1 83.5 87.1 75.0 70.0

52 Saint Vincentand the Grenadines

66.5 -0.4 70.0 64.0 71.5 60.7 77.4 76.7 81.1 73.3 50.0 40.0

53 Malaysia 66.4 0.1 50.0 44.0 84.5 72.5 78.1 79.3 81.6 78.8 45.0 50.054 Mexico 65.3 -2.5 50.0 31.0 80.7 78.3 82.0 61.3 76.5 72.9 60.0 60.0

55 Panama 65.2 0.3 40.0 36.0 84.6 88.2 74.4 41.5 77.8 74.8 65.0 70.0

56 Latvia 65.2 -0.6 50.0 43.0 84.3 43.8 75.9 59.1 79.1 87.1 80.0 50.0

57 Albania 65.1 1.1 35.0 33.0 91.4 69.5 78.2 51.0 78.6 79.8 65.0 70.0

58 Jamaica 65.1 -0.6 40.0 33.0 75.5 58.7 84.7 69.6 72.4 72.1 85.0 60.0

59 Rwanda 64.9 2.2 35.0 40.0 77.2 78.5 73.6 91.4 75.2 78.0 60.0 40.0

60 Thailand 64.9 0.2 45.0 35.0 75.1 87.5 72.5 79.0 69.3 75.2 40.0 70.0

61 Bulgaria 64.7 -0.2 30.0 36.0 93.6 50.3 72.7 84.2 77.8 87.1 55.0 60.0

62 Romania 64.4 -0.3 40.0 37.0 87.4 55.1 70.5 62.6 74.3 87.1 80.0 50.0

63 Trinidad and Tobago 64.4 -2.1 50.0 36.0 85.5 65.1 60.1 77.3 70.1 69.9 60.0 70.0

64 Poland 64.2 0.1 60.0 53.0 74.4 40.3 61.4 61.3 79.1 87.1 65.0 60.0

65 Kazakhstan 63.6 1.5 40.0 29.0 90.4 83.4 72.9 88.7 71.8 79.6 30.0 50.0

66 Cape Verde 63.5 -1.1 65.0 51.0 77.3 61.8 59.0 48.5 80.5 66.9 65.0 60.0

67 France 63.2 -1.4 80.0 68.0 53.8 5.3 83.7 51.6 82.3 82.1 55.0 70.0

68 Portugal 63.0 -1.0 70.0 60.0 59.0 25.5 83.0 32.5 82.6 87.1 70.0 60.0

69 Slovenia 62.9 -1.7 60.0 64.0 64.8 27.9 81.4 42.2 81.2 87.1 70.0 50.0

70 South Africa 62.7 0.0 50.0 45.0 70.7 71.9 75.8 57.3 75.0 76.3 45.0 60.0

71 Kuwait 62.5 -2.4 50.0 45.0 99.9 47.2 61.8 63.5 71.3 81.6 55.0 50.0

72 Montenegro 62.5 0.0 40.0 37.0 91.3 31.7 69.2 86.1 81.2 83.6 55.0 50.0

73 Turkey 62.5 -1.7 50.0 44.0 77.7 58.5 67.1 40.0 71.9 85.4 70.0 60.0


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74 Saudi Arabia 62.5 -3.7 45.0 47.0 99.6 37.3 87.5 71.1 64.9 82.3 40.0 50.0

75 Madagascar 62.4 1.2 40.0 26.0 88.3 93.6 71.1 50.8 76.0 73.5 55.0 50.0

76 Namibia 61.9 -0.8 30.0 44.0 65.7 73.0 70.8 85.0 74.4 86.5 50.0 40.0

77 Belize 61.9 -1.9 30.0 20.0 82.8 74.6 73.6 82.2 77.6 78.1 50.0 50.0

78 Uganda 61.9 0.2 30.0 25.0 80.4 93.0 49.1 87.9 74.6 73.6 45.0 60.0

79 Paraguay 61.8 -0.5 30.0 22.0 96.9 88.5 59.8 27.2 81.4 82.7 70.0 60.0

80 Dominica 61.6 -1.7 60.0 52.0 68.8 43.8 80.5 61.9 85.0 74.3 60.0 30.0

81 Mongolia 61.5 2.0 30.0 27.0 88.5 62.8 67.7 74.5 74.3 79.8 50.0 60.082 Guatemala 60.9 -1.0 30.0 32.0 79.6 93.9 48.5 53.5 77.3 84.6 60.0 50.0

83 Croatia 60.9 -0.2 40.0 41.0 76.4 45.0 63.4 44.4 81.4 87.5 70.0 60.0

84 Ghana 60.7 1.3 50.0 41.0 81.9 48.3 62.9 62.9 66.9 67.8 65.0 60.0

85 Burkina Faso 60.6 0.0 30.0 31.0 80.4 84.0 62.8 58.9 81.4 72.5 55.0 50.0

86 Samoa 60.5 -0.1 60.0 41.0 80.3 61.3 72.9 82.3 77.0 70.0 30.0 30.0

87 Morocco 60.2 0.6 40.0 34.0 69.7 74.8 77.2 27.6 77.9 75.7 65.0 60.0

88 Kyrgyz Republic 60.2 -0.9 20.0 20.0 93.1 66.5 74.1 88.9 71.0 63.2 55.0 50.0

89 Dominican Republic 60.2 0.2 30.0 30.0 85.8 91.4 55.5 58.7 75.1 80.1 55.0 40.0

90 Lebanon 60.1 0.0 25.0 25.0 90.8 68.2 53.9 60.6 76.9 80.4 60.0 60.0

91 Azerbaijan 58.9 -0.8 20.0 24.0 84.9 63.7 68.6 81.6 74.5 77.2 55.0 40.0

92 Italy 58.8 -1.5 50.0 39.0 55.0 19.4 77.4 43.0 82.0 87.1 75.0 60.0

93 Honduras 58.8 0.2 30.0 24.0 83.7 83.4 60.6 30.0 74.1 77.1 65.0 60.0

94 The Gambia 58.8 1.4 30.0 32.0 75.0 85.5 56.3 67.2 71.0 60.5 60.0 50.0

95 Tunisia 58.6 0.1 40.0 43.0 74.8 71.5 82.9 74.1 76.9 58.1 35.0 30.0

96 Zambia 58.3 -1.4 30.0 30.0 73.3 84.9 61.2 51.1 64.9 82.3 55.0 50.0

97 Sri Lanka 58.3 1.2 40.0 32.0 73.5 81.4 78.0 62.1 68.5 77.1 30.0 40.0

98 Serbia 58.0 0.0 40.0 35.0 84.1 39.3 56.5 68.7 68.0 77.9 60.0 50.0

99 Brazil 57.9 1.6 50.0 37.0 69.1 54.8 53.7 59.1 75.8 69.7 50.0 60.0

100 Egypt 57.9 -1.2 35.0 31.0 89.7 64.1 63.8 53.7 62.3 74.0 65.0 40.0

101 Nicaragua 57.9 -0.9 15.0 25.0 77.1 83.0 51.2 63.4 74.0 84.9 55.0 50.0

102 Cambodia 57.6 -0.3 30.0 21.0 91.1 90.0 40.7 47.2 80.7 65.2 60.0 50.0

103 Kenya 57.5 0.1 30.0 21.0 77.7 75.3 61.7 63.3 79.1 66.7 50.0 50.0

104 Bosnia and Herzegovina 57.3 -0.2 20.0 32.0 84.3 24.4 55.2 60.4 80.7 86.0 70.0 60.0

105 Fiji 57.3 -3.1 25.0 20.0 78.1 78.9 59.3 75.8 75.7 69.7 30.0 60.0

106 Swaziland 57.2 -1.9 40.0 32.0 67.2 56.5 66.4 70.8 74.5 69.7 55.0 40.0

107 The Philippines 57.1 0.9 30.0 24.0 79.1 89.7 54.3 51.7 77.1 75.5 40.0 50.0

108 Mozambique 57.1 0.3 30.0 27.0 77.1 69.3 66.8 39.7 74.8 81.1 55.0 50.0

109 Tonga 57.0 1.2 25.0 30.0 85.9 62.2 77.5 92.1 72.1 75.3 30.0 20.0

110 Tanzania 57.0 0.0 30.0 27.0 79.7 80.2 45.2 60.1 69.4 73.5 55.0 50.0


WorldRank

Country OverallScore

Changefrom2011

PropertyRights

Freed

omfromCorruption

Fisca

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Freedom

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11/12

111 Bhutan 56.6 -1.0 60.0 57.0 83.8 55.3 59.7 78.6 72.6 49.5 20.0 30.0

112 Vanuatu 56.6 -0.1 40.0 36.0 97.0 79.9 59.3 50.7 78.4 55.1 30.0 40.0

113 Gabon 56.4 -0.3 40.0 28.0 73.5 81.5 57.7 59.8 77.7 61.1 45.0 40.0

114 Malawi 56.4 0.6 45.0 34.0 79.3 62.2 42.0 58.2 72.6 70.9 50.0 50.0

115 Indonesia 56.4 0.4 30.0 28.0 83.5 91.6 54.6 52.1 75.2 73.9 35.0 40.0

116 Nigeria 56.3 -0.4 30.0 24.0 84.3 72.3 55.6 80.6 72.0 63.9 40.0 40.0

117 Mali 55.8 -0.5 30.0 27.0 60.1 79.9 50.8 66.5 80.7 73.2 50.0 40.0

118 Benin 55.7 -0.3 30.0 28.0 76.2 79.9 42.9 51.5 79.7 59.3 60.0 50.0119 Greece 55.4 -4.9 50.0 35.0 65.3 16.2 76.3 36.6 72.6 82.1 60.0 60.0

120 Senegal 55.4 -0.3 40.0 29.0 65.4 78.5 58.4 43.5 81.6 72.2 45.0 40.0

121 Yemen 55.3 1.1 30.0 22.0 83.1 62.8 71.5 57.3 69.3 81.5 45.0 30.0

122 Pakistan 54.7 -0.4 30.0 23.0 80.6 88.1 70.0 47.8 66.3 66.0 35.0 40.0

123 India 54.6 0.0 50.0 33.0 76.1 74.8 35.5 74.2 62.9 64.1 35.0 40.0

124 Moldova 54.4 -1.3 40.0 29.0 86.5 38.7 70.0 41.7 74.4 79.0 35.0 50.0

125 Niger 54.3 0.0 30.0 26.0 76.9 80.5 35.9 40.8 86.4 71.7 55.0 40.0

126 Cte d'Ivoire 54.3 -1.1 20.0 22.0 78.1 86.6 42.7 56.1 81.7 70.3 35.0 50.0

127 Djibouti 53.9 -0.6 30.0 32.0 80.3 42.4 30.5 61.6 77.2 59.6 65.0 60.0

128 Papua New Guinea 53.8 1.2 20.0 21.0 68.3 72.6 59.0 74.0 73.2 84.8 35.0 30.0

129 Tajikistan 53.4 -0.1 20.0 21.0 89.0 75.5 61.6 56.8 67.4 82.5 20.0 40.0

130 Bangladesh 53.2 0.2 20.0 24.0 72.8 93.9 68.5 55.9 67.5 54.0 55.0 20.0

131 Mauritania 53.0 0.9 25.0 23.0 80.5 71.9 51.3 53.2 75.5 69.9 40.0 40.0

132 Seychelles 53.0 1.8 50.0 48.0 76.0 59.6 62.3 58.0 67.4 33.4 45.0 30.0

133 Suriname 52.6 -0.5 40.0 37.0 63.2 67.5 40.7 81.2 74.5 66.3 25.0 30.0

134 Ethiopia 52.0 1.5 30.0 27.0 74.8 91.1 64.4 55.5 67.1 65.6 25.0 20.0

135 Cameroon 51.8 0.0 30.0 22.0 69.3 90.8 47.1 48.1 70.9 54.9 35.0 50.0

136 Vietnam 51.3 -0.3 15.0 27.0 76.5 66.5 61.1 67.3 75.1 79.6 15.0 30.0

137 Guyana 51.3 1.9 30.0 27.0 64.0 52.0 65.5 65.3 77.4 71.5 30.0 30.0

138 China 51.2 -0.8 20.0 35.0 70.4 84.1 46.4 55.4 74.2 71.6 25.0 30.0

139 Syria 51.2 -0.1 30.0 25.0 84.4 78.5 60.1 50.0 70.9 72.8 20.0 20.0

140 Algeria 51.0 -1.4 30.0 29.0 82.9 47.9 66.3 54.4 76.3 72.8 20.0 30.0

141 Guinea 50.8 -0.9 20.0 20.0 69.3 82.6 38.5 64.7 67.1 61.2 45.0 40.0

142 Haiti 50.7 -1.4 10.0 22.0 80.6 85.3 33.3 65.4 76.0 74.8 30.0 30.0

143 Micronesia 50.7 0.4 30.0 30.0 97.6 3.9 57.0 83.7 73.4 81.0 20.0 30.0

144 Russia 50.5 0.0 25.0 21.0 82.5 48.6 65.1 63.5 66.3 68.2 25.0 40.0

145 Central African Republic 50.3 1.0 20.0 21.0 65.2 92.9 37.3 49.1 74.6 57.8 55.0 30.0

146 Bolivia 50.2 0.2 10.0 28.0 87.0 62.2 56.5 40.8 72.8 74.3 20.0 50.0

147 Nepal 50.2 0.1 30.0 22.0 86.0 88.1 53.6 45.4 74.9 61.5 10.0 30.0


WorldRank

Country OverallScore

Changefrom2011

PropertyRights

Freed

omfromCorruption

Fisca

lFreedom

Gove

rnmentSpending

Busin

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LaborFreedom

MonetaryFreedom

Trade

Freedom

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Finan

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12/12

12 2012 I d f E i F d

148 So Tom and Prncipe 50.2 0.7 30.0 30.0 87.0 49.1 53.2 46.1 64.6 66.6 45.0 30.0

149 Guinea-Bissau 50.1 3.6 20.0 21.0 88.7 63.3 40.5 61.0 75.9 65.3 35.0 30.0

150 Laos 50.0 -1.3 15.0 21.0 79.8 86.6 61.6 55.7 76.9 58.7 25.0 20.0

151 Maldives 49.2 0.9 25.0 23.0 98.0 0.0 89.7 71.9 75.3 43.7 35.0 30.0

152 Sierra Leone 49.1 -0.5 10.0 24.0 80.9 84.3 51.8 42.0 70.1 62.8 45.0 20.0

153 Belarus 49.0 1.1 20.0 25.0 86.6 34.9 71.3 77.0 65.3 80.4 20.0 10.0

154 Liberia 48.6 2.1 30.0 33.0 76.6 74.8 55.9 50.6 71.8 53.8 20.0 20.0

155 Togo 48.3 -0.8 30.0 24.0 68.6 85.6 34.8 45.2 78.3 61.7 25.0 30.0156 Ecuador 48.3 1.2 20.0 25.0 78.3 64.3 54.1 41.0 66.8 68.1 25.0 40.0

157 Burundi 48.1 -1.5 20.0 18.0 72.2 22.9 46.1 67.2 70.9 78.9 55.0 30.0

158 Argentina 48.0 -3.7 20.0 29.0 65.5 56.9 61.0 48.9 60.7 67.6 40.0 30.0

159 Kiribati 46.9 2.1 30.0 32.0 72.4 0.0 61.2 85.5 77.3 55.4 25.0 30.0

160 Angola 46.7 0.5 20.0 19.0 84.1 53.2 45.5 43.9 61.2 65.2 35.0 40.0

161 Lesotho 46.6 -0.9 40.0 35.0 49.1 0.0 57.5 65.0 75.5 69.1 35.0 40.0

162 Solomon Islands 46.2 0.3 30.0 28.0 69.3 30.3 63.7 68.1 77.4 55.4 10.0 30.0

163 Ukraine 46.1 0.3 30.0 24.0 78.2 29.4 46.2 51.2 67.7 84.4 20.0 30.0

164 Uzbekistan 45.8 0.0 15.0 16.0 94.4 64.9 67.6 60.1 64.2 66.1 0.0 10.0

165 Comoros 45.7 1.9 30.0 21.0 64.9 85.3 41.5 31.2 78.3 69.4 15.0 20.0

166 Chad 44.8 -0.5 20.0 17.0 50.2 74.2 24.9 43.7 72.5 55.6 50.0 40.0

167 Republic of Congo 43.8 0.2 10.0 21.0 61.3 78.0 40.6 45.7 71.0 60.7 20.0 30.0

168 Turkmenistan 43.8 0.2 10.0 16.0 98.4 93.5 30.0 30.0 71.0 79.2 0.0 10.0

169 Timor-Leste 43.3 0.5 20.0 25.0 64.7 0.0 43.1 75.1 77.4 73.0 35.0 20.0

170 Equatorial Guinea 42.8 -4.7 20.0 19.0 75.5 28.0 44.7 43.8 73.1 58.8 25.0 40.0

171 Iran 42.3 0.2 10.0 22.0 80.6 76.9 64.8 51.5 62.0 45.7 0.0 10.0

172 Democratic Republic

of Congo

41.1 0.4 10.0 20.0 72.5 76.1 38.7 39.0 51.2 63.0 20.0 20.0

173 Burma 38.7 0.9 10.0 14.0 82.0 96.0 20.0 20.0 61.2 73.6 0.0 10.0

174 Venezuela 38.1 0.5 5.0 20.0 74.8 67.3 47.3 36.0 46.4 58.8 5.0 20.0

175 Eritrea 36.2 -0.5 10.0 26.0 57.0 46.8 17.1 63.2 52.9 69.1 0.0 20.0

176 Libya 35.9 -2.7 10.0 22.0 80.2 17.9 20.0 20.0 73.6 85.0 10.0 20.0

177 Cuba 28.3 0.6 10.0 37.0 61.5 0.0 10.0 20.0 71.3 62.7 0.0 10.0

178 Zimbabwe 26.3 4.2 10.0 24.0 65.2 38.7 34.9 29.6 0.0 50.4 0.0 10.0

179 North Korea 1.0 0.0 5.0 5.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

N/A Afghanistan N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

N/A Iraq N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

N/A Liechtenstein N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

N/A Somalia N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

N/A Sudan N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A


WorldRank

Country Overa

llScore

Changefrom2011

Prope

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Freed

omfromCorruption

FiscalFreedom

GovernmentSpending

Busin

essFreedom

LaborFreedom

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FinancialFreedom

executive highlights

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