Mapped: Economic Freedom Around the World
How would you define a country’s economic freedom?
The cornerstones of economic freedom by most measures are personal choice, voluntary exchange, independence to compete in markets, and security of the person and privately-owned property. Simply put, it is about the quality of political and economic institutions in countries.
Based on the Index of Economic Freedom by the Heritage Organization, we mapped the economic freedom of 178 countries worldwide.
Measures of Economic Freedom
The index uses five broad areas to score economic freedom for each country:
- Size of Government: Greater government spending, taxation, and bigger government agencies tend to reduce individual choice and economic freedom.
- Legal System and Property Rights: The ability to accumulate private property and wealth is a central motivating force for workers and investors in a market economy, and well-functioning legal frameworks protect the rights of all citizens.
- Sound Money: Does earned money maintain its value, or is it lost to inflation? When inflation is high and volatile, individuals can’t plan for the future and use economic freedom effectively.
- Freedom to Trade Internationally: Freedom to exchange—in its broadest sense, buying, selling, making contracts, and so on—is considered essential to economic prosperity. Limited international trading options significantly reduce the potential for growth.
- Regulation: When governments utilize tools and impose oppressive regulations that limit the right to exchange, economic freedom typically suffers.
World Economic Freedom by Region
In 2021, the global average economic freedom score is 61.6, the highest its been in 27 years.
But from Mauritius and smaller African nations being beacons of hope to East Asian and Oceanic countries epitomizing economic democracy, every region has a different story to tell.
Let’s take a look at the economic freedom of each region in the world.
Even though the U.S. and Canada continue to be some of the most economically free countries globally, some markers are suffering.
The regional average unemployment rate has risen to 6.9%, and inflation (outside of Venezuela) has increased to 5.2%. The region’s average level of public debt—already the highest globally—rose to 85.2% of its GDP during the past year.
Across many Latin American countries, widespread corruption and weak protection of property rights have aggravated regulatory inefficiency and monetary instability.
For example, Argentina’s Peronist government has recently fixed the price of 1,432 products as a response to a 3.5% price rise in September, the equivalent to a 53% increase if annualized.
More than half of the world’s 38 freest countries (with overall scores above 70) are in Europe. This is due to the region’s relatively extensive and long-established free-market institutions, the robust rule of law, and exceptionally strong investment freedom.
However, Europe still struggles with a variety of policy barriers to vigorous economic expansion. This includes overly protective and costly labor regulations, which was one of the major reasons why the UK voted to leave the EU.
Brexit has since had a major impact on the region.
Even a year later, official UK figures showed a record fall in trade with the EU in January 2021, as the economy struggled with post-Brexit rules and the pandemic.
Dictatorships, corruption, and conflict have historically kept African nations as some of the most economically repressed in the world.
While larger and more prosperous African nations struggle to advance economic freedom, some smaller countries are becoming the beacon of hope for the continent.
Mauritius (rank 11), Seychelles (43) and Botswana (45) were the top African countries, offering the most robust policies and institutions supporting economic self-sufficiency.
From property rights to financial freedom, small African countries are racing ahead of the continent’s largest in advancing economic autonomy as they look to build business opportunities for their citizens.
Middle East and Central Asia
When Israel, the UAE, and Bahrain signed the Abraham Accords last year, there was a sense of a new paradigm emerging in a region with a long history of strife.
A year into the signing of this resolution, the effects have been promising. There have been bilateral initiatives within the private sector and civil society leading to increasing economic and political stability in the region.
Central Asian countries once part of the Soviet Union have recently starting integrating more directly with the world economy, primarily through natural resource exports. In total, natural resources account for about 65% of exports in Kyrgyzstan, Tajikistan, and Uzbekistan, and more than 90% in Kazakhstan and Turkmenistan.
Despite this progress, these countries have a long way to go in terms of economic freedom. Uzbekistan (108), Turkmenistan (167) and Tajikistan (134) are still some of the lowest-ranked countries in the world.
East Asia and Oceania
Despite massive populations and strong economies, countries like China and India remain mostly unfree economies. The modest improvements in scores over the last few years have been through gains in property rights, judicial effectiveness, and business freedom indicators.
Nearby, Singapore’s economy has been ranked the freest in the world for the second year in a row. Singapore remains the only country in the world that is considered economically free in every index category.
Finally, it’s worth noting that Australia and New Zealand are regional leaders, and are two of only five nations that are currently in the “free” category of the index.
Mapped: How Much Does it Take to be the Top 1% in Each U.S. State?
An annual income anywhere between $360,000-$950,000 can grant entry into the top 1%—depending on where you live in America.
How Much Does it Take to be the Top 1% in Each U.S. State?
There’s an old saying: everyone thinks that they’re middle-class.
But how many people think, or know, that they really belong to the top 1% in the country?
Data from personal finance advisory services company, SmartAsset, reveals the annual income threshold at which a household can be considered part of the top 1% in their state.
Some states demand a much higher yearly earnings from their residents to be a part of the rarefied league, but which ones are they, and how much does one need to earn to make it to the very top echelon of income?
Ranking U.S. States By Income to Be in the Top 1%
At the top of the list, a household in Connecticut needs to earn nearly $953,000 annually to be part of the one-percenters. This is the highest minimum threshold across the country.
In the same region, Massachusetts requires a minimum annual earnings of $903,401 from its top 1% residents.
Here’s the list of all 50 U.S. states along with the annual income needed to be in the 1%.
|Rank||State||Top 1% Income|
|Top 1% Tax Rate
(% of annual income)
California ($844,266), New Jersey ($817,346), and Washington ($804,853) round out the top five states with the highest minimum thresholds to make it to their exclusive rich club.
On the other end of the spectrum, the top one-percenters in West Virginia make a minimum of $367,582 a year, the lowest of all the states, and about one-third of the threshold in Connecticut. And just down southwest of the Mountain State, Mississippi’s one-percenters need to make at least $381,919 a year to qualify for the 1%.
A quick glance at the map above also reveals some regional insights.
The Northeast and West Coast, with their large urban and economic hubs, have higher income entry requirements for the top 1% than states in the American South.
This also correlates to the median income by state, a measure showing Massachusetts households make nearly $90,000 a year, compared to Mississippians who take home $49,000 annually.
How Much Do the Top 1% Pay in Taxes?
Meanwhile, if one does make it to the top 1% in states like Connecticut and Massachusetts, expect to pay more in taxes than other states, according to SmartAsset’s analysis.
The one-percenters in the top five states pay, on average, between 26–28% of their income in tax, compared to those in the bottom five who pay between 21–23%.
And this pattern exists through the dataset, with higher top 1% income thresholds correlating with higher average tax rates for the wealthy.
|State Ranks||Median Tax Rate|
These higher tax rates point to attempts to reign in the increasing wealth disparity in the nation where the top 1% hold more than one-third of the country’s wealth, up from 27% in 1989.
Misc4 weeks ago
Ranked: The World’s Largest Stadiums
Maps2 weeks ago
The Incredible Historical Map That Changed Cartography
Markets3 weeks ago
Charted: Six Red Flags Pointing to China’s Economy Slowing Down
VC+2 weeks ago
What’s New on VC+ in September
Markets3 weeks ago
The 25 Best Stocks by Shareholder Wealth Creation (1926-2022)
Business1 week ago
Ranked: The 20 Best Franchises to Open in the U.S.
Money3 weeks ago
How Much Does it Take to Be Wealthy in America?
Markets1 week ago
Ranked: The Highest Paid CEOs in the S&P 500