By Andrew Dunn
With an ever-expanding federal government, the U.S. has fallen out of the top five countries for economic freedom, according to a new report from the Fraser Institute.
America now ranks as No. 6, behind Hong Kong, Singapore, New Zealand, Switzerland, and Georgia. The U.S. ranked particularly poorly in its size of government and freedom to trade internationally.
The Fraser Institute ranks countries annually based on nearly four dozen measures of economic freedom. The highest-rated countries score well for “protection of privately owned property, a legal system that treats all equally, even-handed enforcement of contracts, and a stable monetary environment,” according to the report.
Taxes must also be low, international trade available without onerous barriers, and allocate resources by free markets rather than government distribution.
High-ranking countries for economic freedom have a higher GDP per capita, higher incomes, less poverty, and longer life expectancy. Economic freedom is associated with faster economic growth and increased social mobility, as well, allowing people at the bottom of the income spectrum to rise to the middle class or above.
The U.S. had ranked in the top five for the past two years. In 1980 and 1990, America had ranked as high as No. 2.
“Where people are free to pursue their own opportunities and make their own choices, they lead more prosperous, happier and healthier lives,” said Fred McMahon, research chair in economic freedom at the Fraser Institute, in a statement.
While the U.S. slipped in this year’s rankings, America’s neighbor to the north is in free fall. Canada now ranks No. 14 after years in the top 10. The Fraser Institute cited increasing taxes and regulation for Canada’s drop in the rankings.
Hong Kong’s top ranking was based primarily on a small central government, low regulations, sound fiscal policy and easy access to international trade.
The lowest-rated countries are primarily 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 in last.
Other major country rankings:
Sweden: 37 (tie)
Norway: 37 (tie)