Key Points

• The index published in Economic Freedom of the World 2025 measures the degree to which people in 165 jurisdictions around the globe are allowed to make their own economic choices.


• In the year with the most recent data (2023), the most-economically free jurisdictions were Hong Kong (1st), Singapore (2nd), New Zealand (3rd), Switzerland (4th), the United States (5th), Ireland (6th), Australia and Taiwan (tied for 7th), Denmark (9th), and the Netherlands (10th).


• Overall, the index shows that global economic freedom has increased since 2000, but fell precipitously following the coronavirus pandemic, erasing nearly a decade of progress.


• This year’s report also includes three chapters which explore the effect of President Trump’s tariffs on US economic freedom; the relationship between economic freedom and peace; and the relationship between economic freedom and the quality of education.


• The United Kingdom dropped one place between 2024 and 2025 from 12th to 13th. Its overall score (7.88), however, remains the same.


• UK economic freedom remains lower than the pre-COVID, pre-Brexit levels of 2019 (8.09), and the all-time high score of 2000 (8.2). 


• The standard of living in the most economically free nations is far higher than in the least free. In comparing the economically freest 25 percent of countries with the least free, we find:
  
  
  
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     1. Average incomes are 6.2 times greater;
     
     
     2. The bottom 10% of incomes are 7.8 times greater;
     
     
     3. People tend to work seven fewer hours each week;
     
     
     4. People live about 17 years longer;
     
     
     5. Far fewer children die in infancy;
     
     
     6. People are more satisfied with their lives;
     
     
     7. Governments are less corrupt; and
     
     
     8. Environments are cleaner.
     
     
     
     

     Executive Summary

     
     The index published in Economic Freedom of the World (EFW) measures economic freedom in up to 165 jurisdictions as far back as 1970. Economic freedoms are a subset of human freedoms and concern economic activity such as working, transacting, contracting, and owning and using productive property.
     
     Individuals are more economically free when they are allowed to make more of their own economic choices, with others imposing fewer and less severe constraints on those choices. They must, however, respect the rights of others.
     
     The index measures economic freedom using 45 components and subcomponents grouped into five areas: [1] Size of Government, [2] Legal System and Property Rights, [3] Sound Money, [4] Freedom to Trade Internationally, and [5] Regulation. Each component and subcomponent is placed on a scale from zero to 10, reflecting the distribution of the underlying data.
     
     In 2023—the latest year for which data are available—the 10 highest scoring nations were Hong Kong, Singapore, New Zealand, Switzerland, the United States, Ireland, Australia and Taiwan (tied for 7th), Denmark, and the Netherlands.
     
     The rankings of other major world economies include Canada (11th), the United Kingdom (13th), Germany (15th), Japan (17th), Korea (38th), France (44th), Italy (46th), Indonesia (65th), Mexico (70th), India (86th), Brazil (87th), China (108th), and Russia (148th).
     
     The 10 lowest-ranked countries were Chad, Libya, Syria, Argentina, Myanmar, Iran, Algeria, Sudan, Zimbabwe, and Venezuela.
     
     Overall, the index shows that economic freedom has increased since 2000, but fell precipitously following the coronavirus pandemic, erasing nearly a decade of progress. Standards of living in the most economically free societies are significantly greater than in the least free:
     
     Those in the freest 25% of countries earn, on average, about 6.2 times as much as those in the least free.
     
     Though the share of income earned by the poorest 10% of the population is unrelated to economic freedom, the level of income earned by the poorest 10% of the population is much higher in countries with greater economic freedom. The bottom 10% threshold is 7.8 times higher in the freest quartile than it is in the least free. 
     
     
     
     1. The rate of poverty in the least-free quartile is about 25 times greater than it is in the freest.
     
     
     2. People in the least-free quartile work about 20% more than those in the freest.
     
     
     3. People in the freest quartile live about 17 years longer than those in the least-free quartile.
     
     
     4. In the least free countries, infants die at nearly 10 times the rate as they do in the freest countries.
     
     
     5. Economic freedom is positively correlated with personal freedom, with life satisfaction, with non-corrupt government, and with a cleaner environment.
     
     

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