The Index of Economic Freedom prepared by the Heritage Foundation has been evaluating freedom in different countries around the world for 30 years. This well-known report takes into account 12 factors to give a final rating in terms of freedom and groups countries into five categories according to the score they obtain: free, mostly free, moderately free, mostly unfree and repressed.

The report, compiled since 1995, considers political and economic conditions. The latest report, which considers 184 countries, shows that the world is mostly unfree. Unfortunately, the global average score (58.6) fell to its lowest level since 2001.

In this 2024 report, four economies managed to enter the select group of "free" countries: Singapore, Switzerland, Ireland and Taiwan. Singapore maintains its first place and consolidates itself as a stable economy in the defense of freedom.

Meanwhile, the United States stands out as it continues to decline. Its rating plummeted to 70.1 points, the lowest level since this index began.

The United States continues to lose economic freedom

Unfortunately, the United States continues to lose economic freedom, this year it has lost 0.5 points in its rating (70.1) compared to the previous year. The country ranked 25th in the index, and although it remains in the group of "mostly free" countries currently, it is close to dropping out of that category and descending to the group of "moderately free" countries.

The report notes that issues such as uncertainty and bad policies are affecting the country's freedom: "Over the years, unchecked deficit spending and government debt have accelerated, and inflation has undercut economic livelihood. Uncertainty and poor policy choices have left the U.S. economic outlook in flux."

The aspects in which the country obtains the best marks are property rights, freedom to do business, freedom of investment, and financial freedom. The aspect in which it performs the worst is state spending. The public debt of the United States amounts to 121.3% of GDP, and the average public spending over the last three years is 41.4% of GDP.

The United States' rating in the Heritage Index prepared by has been falling uninterruptedly since 2020. In 2021, for the first time, it fell below 75 points. In 2022, it took a dramatic drop of 2.7 points compared to the previous year, and by 2023, it fell 1.5 points, obtaining a rating of 70.6.

Regarding state spending, which obtains the worst rating and is affecting the country's index the most, it is highlighted that the rating began to fall in 2021 and it even puts the country into the category of public spending in countries with repression. In 2022, it fell 7.7 points, obtaining a rating of 54.5; by 2023, it fell 5.2 points more, leaving it with a score of 49.3.

The importance of economic freedom

The Heritage Index3 not only shows the situation of each country in terms of freedom but also highlights the positive consequences of allowing free trade and having free economies. The report highlights that, regardless of a country's current level of development, its economic prosperity can always be increased by expanding its level of freedom. Heritage calls for reducing taxes, reducing regulations, opening up to competition, and generally embracing freedom policies that allow individuals to flourish in their economic activities.

The data proves a clear relationship between freedom and prosperity. Per capita income is much higher in freer countries. Countries in the free category have a GDP per capita 10 times higher than countries in the "repressed" category. As you move up the scale of freedom, you see how the country's average income also increases. In countries that are in the “free” or “mostly free” categories, the average income is more than double that of other countries in the other less free categories.

Furthermore, the report and data published by Heritage show that freedom not only brings economic benefits but also impacts issues such as health, education, the environment, social progress, and, in broad terms, the general well-being of people in a country.

For example, Heritage considers the relationship between its index and the Human Development Index developed by the United Nations, which measures life expectancy, literacy, education and living standards in countries around the world. Countries with a higher score on the freedom index also have a higher score on the human development index.

"The record is clear: Economically free and dynamic societies have demonstrated repeatedly that they are able to improve standards of living and respond effectively to any crises that may arise," concludes the Heritage Foundation's 2024 Economic Freedom Index.