The U.S. has tumbled down the world rankings for economic freedom thanks to the erosion of the rule of law and an onslaught of regulations.
The Fraser Institute places the U.S. as the 16th freest economy in the world, a sharp decline from second place it once enjoyed back in 2000.
Fred McMahon, chair in Economic Freedom with the Fraser Institute, attributed the collapse in the rankings to “a weakened rule of law, the so-called wars on terrorism and drugs, and a confused regulatory environment have helped erode economic freedom in the United States, which has now fallen behind more economically free countries such as Qatar, Jordan and the U.A.E.”
Once seen as a the beacon of economic liberty, America has now fallen behind many European nations including the U.K., Ireland and Switzerland.
The report examines 157 countries and territories measuring a host of indicators including “levels of personal choice, ability to enter markets, security of privately owned property,” and the rule of law. (RELATED: United States Drops In Overall Freedom Ranking)
Hong Kong and Singapore managed to top the list thanks to low tax policies and light touch regulatory regimes. However, McMahon warns that Hong Kong shouldn’t rest on its laurels and it could see a slip down the index. “Hong Kong’s still number one but because democracy is the best safeguard of freedom, if China, which ranks low in economic freedom, encroaches on Hong Kong, we can expect Hong Kong’s ranking to fall,” McMahon said.
The report purports to show a strong correlation between economic freedom and a number of socially desirable outcomes such as rising living standards and life expectancy. People living in the world’s economically freest countries average a life expectancy of 80 years while in the economically least free countries life expectancy is around 63.
Furthermore, economically free countries are substantially wealthier than their most authoritarian counterparts, with GDP per capita reaching $38,601 compared to $6,986. In a damning verdict on the last decade of economic policies pursued by Presidents Bush and Obama, the report says:
Nowhere has the reversal of the rising [global] trend in economic freedom been more evident than in the United States
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