According to the Economic Freedom of the World 2017, an annual report compiled by the Cato Institute, Estonia ranks 10th in the world in economic freedom – one step ahead of the United States and Canada.
This year’s index that ranks 159 countries for 2015, the most recent year for which data is available, measures the degree to which the policies and institutions of countries are supportive of economic freedom. “The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to enter markets and compete, and security of the person and privately owned property. Forty-two data points are used to construct a summary index and to measure the degree of economic freedom in five broad areas: the size of government; the legal system and property rights; sound money; the freedom to trade internationally; and regulation.”
Hong Kong, Singapore and New Zealand are the top three countries in the world for economic freedom, followed by Switzerland, Ireland and the United Kingdom.
Baltic countries all in the top 20
Estonia’s solid 10th spot in the index is five spots higher than the country ranked in the last year’s index (that was based on the 2014 data). Estonia did come tenth based on the 2010 data and 11th based on the 2005 data; however, based on the 2000 data, the country was 23rd in the index.
“A quarter of a century after the fall of communism provides an interesting time to consider the variation in economic freedom among former communist countries,” Cato says in its report, pointing out that “five former communist countries – Georgia, Estonia, Lithuania, Latvia, and Romania – place them among the 20 most free economies in the world”.
“Other former communist countries, Armenia (29th) Albania (32nd), Czech Republic (42nd) Mongolia (45th) and Bulgaria (48th) rank in the top 50. But other former communist countries continue to lag well behind. The five former communist countries with the lowest summary ratings in 2015 are Bosnia and Herzegovina, Russia, Moldova, Azerbaijan and Ukraine. The EFW rating of Ukraine is particularly low, and its ranking (149th) is one of the world’s lowest.”
Estonia’s southern neighbour Latvia is ranked 17th (sharing the spot with Finland) and Lithuania 13th.
The Cato Institute is an American libertarian think tank headquartered in Washington, DC. It was established to have a focus on public advocacy, media exposure and societal influence.
Cover: Rotermann business quarter, in the heart of Tallinn (the image is illustrative).