With an ever-expanding federal government, the United States is no longer among the top five countries for economic freedom, according to a new report from the Fraser Institute.
America now ranks 6th, behind Hong Kong, Singapore, New Zealand, Switzerland and Georgia. The United States ranks particularly poorly when it comes to the size of its government and its freedom to trade internationally.
The Fraser Institute ranks countries annually on nearly four dozen measures of economic freedom. High-scoring countries score well on “the protection of private property, a legal system that treats everyone equally, impartial contract enforcement, and a stable monetary environment,” according to the report.
Taxes must also be low, international trade available without onerous barriers, and resource allocation through free markets rather than government distribution.
Countries that rank higher for economic freedom have higher GDP per capita, higher incomes, less poverty, and longer life expectancies. Economic freedom is also associated with faster economic growth and increased social mobility, allowing people at the bottom of the income scale to move into the middle class or above.
The United States had been in the top five for the past two years. In 1980 and 1990, America ranked second.
“Where people are free to pursue their own opportunities and make their own choices, they lead more prosperous, happier and healthier lives,” said Fraser McMahon, Economic Freedom Research Chair. Institute, in a press release.
While the United States has slipped in the rankings this year, America’s northern neighbor is in freefall. Canada now ranks 14th after years in the top 10. The Fraser Institute cited increased taxes and regulations as the reason for Canada’s drop in the rankings.
Hong Kong’s first ranking was mainly based on a small central government, weak regulations, sound fiscal policy and easy access to international trade.
The lowest rated countries are mainly in Africa and the Middle East: Central African Republic, Democratic Republic of Congo, Syria, Republic of Congo, Iran, Zimbabwe, Algeria, Libya and Sudan. Venezuela came last.
Other major country rankings:
- Japan: 18
- Germany: 22
- Sweden: 37 (tie)
- Norway: 37 (tie)
- Italy: 47
- France: 53
- Mexico: 75
- Russia: 100
- India: 108
- Brazil: 109
- China: 116