The 2022 Index of Economic Freedom – a cross-country study by The Heritage Foundation measuring the economic governance and entrepreneurial environments of 177 countries – was released on Monday.
The key message? Economic freedom matters more than ever.
Heritage’s annual index has tracked economic freedom around the world since 1995. Nations committed to limited government and free enterprise score highest on a scale of 0 to 100 in assessing four policy pillars essentials, including the rule of law and effective regulation.
Especially now, these commitments are necessary for economic growth and human flourishing.
As the Index of Economic Freedom has shown for more than a quarter century, countries that achieve higher levels of economic freedom consistently outperform others in long-term economic agility and prosperity. Countries with low economic freedom, on the other hand, are those that fall into economic stagnation, high unemployment and deteriorating social conditions.
Here are five takeaways from the 2022 Index of Economic Freedom.
1. On average, countries remain “moderately free”, but barely. The global average score for economic freedom is now 60, down 1.6 points from 61.6 a year earlier. A loss of one-tenth of a point more would drop the average score into the “mostly unfree” category.
2. The data again shows that economic freedom is closely linked to general well-being, which includes factors such as health, education, environment, innovation, overall societal progress and democratic governance.
3. A shake-up has occurred in the top 10 index rankings. Although Singapore retained its status as the world’s freest economy, Australia, Canada and the United Kingdom fell out of the top 10. Several smaller European countries performed well, with Switzerland becoming the second freest in the world and Estonia continuing to dominate. the Baltic region as the seventh freest economy.
4. Taiwan has become a “free” economy, scoring over 80 points for the first time. As the sixth freest economy in the world, Taiwan’s openness, resilience and competitiveness are impressive.
5. Unfortunately, the United States dipped deeper into the “mainly free” category with a drop to 25th place, its lowest ranking in the index’s 28-year history. The main causative factor for the erosion of America’s economic freedom is excessive government spending, which has led to an increase in the deficit and debt burden.
Public spending around the world in response to the COVID-19 pandemic has hurt the fiscal health of nations. From an economic policy perspective, it is now imperative that governments avoid making the problem worse with misguided policy actions that distort markets, destroy incentives to work and innovate, or diminish prospects for recovery and growth. fast.
In the long term, the proven way to revitalize economic livelihoods in the most meaningful way is to restore what we know has worked everywhere it has been tried for centuries: leaving people’s economic freedom in their own hands.
In contrast, socialism has failed wherever it has been tried because it focuses on government control and management over individuals, as if the government knows what is best for them. Socialism is a failed system that denies people economic freedom and therefore the ability to pursue and realize their dreams.
As the 2022 Index of Economic Freedom shows, the global economy can emerge more resilient from this pandemic by choosing the path through a renewed commitment to economic freedom. This requires the rule of law, limited government, and policies that support regulatory efficiency and market openness.
The lasting solutions to our current economic problems do not lie in more government regulation and control. They lie in a return to the principles of the free market which have unambiguously made our societies stronger, more dynamic and ever more flourishing.
Do you have an opinion on this article ? To chime in, please email [email protected] and we’ll consider posting your edited remarks in our regular “We Hear You” column. Don’t forget to include the article’s URL or title as well as your name and city and/or state.