When institutions protect the liberty of individuals, greater prosperity results for all. Economist Adam Smith formed this theory in his influential work, The Wealth of Nations, in 1776. In 2013, his theory is measured by the Index of Economic Freedom. The world average score of 59.6 was only one-tenth of a point above the 2012 average. Since reaching a global peak in 2008, the WSJ and Heritage note, economic freedom has continued to stagnate.
From North Korea (the least ‘free’) to Hong Kong (the most ‘free’) the following heatmaps break down the 177 countries covered across 10 specific categories: property rights, freedom from corruption, fiscal freedom, government spending, business freedom, labor freedom, monetary freedom, trade freedom, investment freedom, and financial freedom. On the plus side, average government spending scores improved. Unfortunately, this was matched by a decline in regulatory efficiency, as a number of countries hiked minimum wages and tightened control of labor markets. The world’s most-improved country is Georgia, and the country that saw the biggest decline was Belize (we blame McAfee).
The United States, with an economic freedom score of 76, registered a loss of economic freedom for the fifth consecutive year, and its lowest score since 2000. Its score is 0.3 point lower than last year, with declines in monetary freedom, business freedom, labor freedom, and fiscal freedom.