Index of Economic Freedom 2021
US conservative think-tank, The Heritage Foundation recently released The Index of Economic Freedom 2021.
What is The Heritage Foundation?
The Heritage Foundation is a US based think tank primarily geared towards public policy. The foundation took a leading role in the conservative movement during the presidency of Ronald Reagan, whose policies were taken from Heritage's policy study Mandate for Leadership.
About The Index of Economic Freedom
The Index of Economic Freedom is an annual index and ranking. It was created by conservative think-tank The Heritage Foundation and The Wall Street Journal to measure the degree of economic freedom in the world's nations.
The creators of the index claim to take an approach inspired by Adam Smith's in The Wealth of Nations that "basic institutions that protect the liberty of individuals to pursue their own economic interests result in greater prosperity for the larger society".
About The Index of Economic Freedom 2021
- Singapore topped the global ranking for the second year in a row in the latest Economic Freedom Index.
- Singapore increased its overall score by 0.3 points to 89.7 primarily due to an improvement in the score for government spending. Singapore's score is well-above the regional and world averages.
- Rounding up the global top five are New Zealand in second place with 83.9 points, Australia, third (82.4 points), Switzerland in fourth with 81.9 points and Ireland (81.4 points).
- As for the major economies, the United Kingdom is 7th (78.4 points) United States is ranked 20th with a score of 74.8 points, Japan 23rd (74.1 points), Germany is 29th (72.5 points) and China is number 107 scoring 58.4 points.
- 184 countries were covered in the study this time and the period of study is July 2019 to June 2020.
- The index ranks 12 indicators from property rights to financial freedom under four categories: rule of law, size of government, regulatory efficiency and open markets.
- Hong Kong was left out of the 2021 index calculation for the first time. It is because of China’s increasing control over the city’s economic policies. Hong Kong topped the index for 25 out of 26 years except for 2020.
- The small island nation of Singapore made improvements or maintained its score for all 12 indicators except monetary freedom and judicial effectiveness which declined marginally, but its scores in these two indicators are still exceptionally high when compared with most other countries.
India’s Rank in The Index of Economic Freedom 2021
India ranked 121st in the index with a score of 56.5 points under the category of ‘mostly unfree’. In Asia-Pacific, India ranked 26th among the 40 countries.
