Economic Freedom: Hong Kong, Singapore On Top, US Falls In Ranking

The United States has fallen 15 places since 2000 in a global ranking of economic freedom, while Hong Kong and Singapore maintained their top spots.

The "Economic Freedom of the World" report 2013, compiled by Canada's Fraser Institute, ranks Hong Kong first with an overall Economic Freedom Rating of 8.97, followed by Singapore (8.73). In the area of credit market regulations, both the East Asian City States scored 10 out of 10.

The United States is positioned as the world's 17th freest economy behind nations such as New Zealand, Switzerland, United Arab Emirates, Mauritius, Finland, Bahrain, Canada, and Australia, who are in the top ten.

Throughout most of the period from 1980 to 2000, the United States ranked as the world's third-freest economy, behind Hong Kong and Singapore.

The U.S. ratings and rankings have fallen in all five areas of the EFW index. The worst reduction was in the area of Legal System and Property Rights, where the rating had slid to 6.93, placing the United States 38th worldwide, tied with Venezuela.

The report blames the slippage of the United States, once considered a bastion of economic freedom, on "overspending, weakening rule of law, and regulatory overkill on the part of the U.S. government."

Major countries ranked below the United States include Germany, Japan, South Korea, France, Italy, Mexico, Russia, Brazil, and India. China, despite being a major economic power, is ranked as low as 123rd in a list of 152 countries.

Eight of the ten lowest-rated countries are located in Africa, with Myanmar and Venezuela ending up in last place.

The index published in the report, which was compiled using data and surveys from the World Bank, International Monetary Fund, and World Economic Forum, measures the degree to which the policies and institutions of countries are supportive of economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to compete, and security of privately owned property. The degree of economic freedom to rank countries was measured using five criteria: Size of Government, Legal System and Property Rights, Sound Money, Freedom to Trade Internationally, and Regulation.

The average chain-linked economic freedom rating for the countries has increased from 5.34 in 1980 to 6.87 in 2011.

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Economic Freedom: Hong Kong, Singapore On Top, US Falls In Ranking