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AboutTheIndex
When institutions protect the liberty of individuals, greater prosperity results for all.
Economist Adam Smith formed this theory in his influential work, The Wealth of Nations, in 1776. In 2013, his
theory is measured and proven in the Index of Economic Freedom, an annual guide published by The
Wall Street Journal and The Heritage Foundation, Washington's No. 1 think tank.
For over a decade, The Wall Street Journal and The Heritage Foundation, Washington's preeminent think
tank, have tracked the march of economic freedom around the world with the influential Index of Economic
Freedom. Since 1995, the Index has brought Smith's theories about liberty, prosperity and economic
freedom to life by creating 10 benchmarks that gauge the economic success of 185 countries around the
world. With its user-friendly format, readers can see how 18th century theories on prosperity and economic
freedom are realities in the 21st century.
The Index covers 10 freedoms from property rights to entrepreneurship in 185 countries.

Experts
Index authors and expert analysts are available for media
interviews and speaking events.
Ambassador Terry Miller, The Heritage Foundation
(http://www.heritage.org/about/staff/m/ambassadorterry-miller)
Kim R. Holmes, Ph.D., The Heritage Foundation
(http://www.heritage.org/about/staff/h/kimholmes)
James M. Roberts, The Heritage Foundation
(http://www.heritage.org/about/staff/r/jamesroberts)
Anthony B. Kim, The Heritage Foundation
(http://www.heritage.org/about/staff/k/anthonykim)

Press Releases
Overview (/index/press-releaseoverview)
Asia Pacific (/index/press-releaseasia-pacific)
Europe (/index/press-releaseeurope)
North Africa / Middle East
(/index/press-release-north-africamiddle-east)
South America (/index/pressrelease-south-america)
Sub Saharan Africa (/index/pressrelease-sub-saharan-africa)

FrequentlyAskedQuestions
Q.1. What is economic freedom?
Economic freedom is the fundamental right of every human to control his or her own labor and property. In
an economically free society, individuals are free to work, produce, consume, and invest in any way they
please, with that freedom both protected by the state and unconstrained by the state. In economically free
societies, governments allow labor, capital and goods to move freely, and refrain from coercion or constraint
of liberty beyond the extent necessary to protect and maintain liberty itself. Read Chapter 1 - Economic
Freedom: Global and Regional Patterns (/index/book/chapter-1) by Ambassador Terry Miller and Anthony B.
Kim.

Q.2. What are the benefits of economic freedom?

Studies in this and previous editions of the Index of Economic Freedom demonstrate important
relationships between economic freedom and positive social and economic values such as per capita
income, economic growth rates, human development, democracy, the elimination of poverty, and
environmental protection. For further information, see especially:
Executive Highlights (/index/book/executive-highlights),
Chapter 2: The Rule of Law (/index/book/chapter-2),
Chapter 3: Democracy, Law and Order, and Economic Growth (/index/book/chapter-3),
Chapter 4: Economic Freedom and Economic Privilege (/index/book/chapter-4),
Chapter 5: Property Rights Can Solve the Resource Curse (/index/book/chapter-5),
Chapter 6: Good Business Demands Good Governance (/index/book/chapter-6),
Chapter 7: Defining Economic Freedom (/index/book/chapter-7), and
Chapter 8: The Countries (/index/book/chapter-8).

Q.3. How do you measure economic freedom?

We measure ten components of economic freedom, assigning a grade in each using a scale from 0 to 100,
where 100 represents the maximum freedom. The 10 economic freedoms are grouped into four broad
categories or pillars of economic freedom:
1. Rule of Law (rule-of-law) (property rights, freedom from corruption);
2. Limited Government (limited-government) (fiscal freedom, government spending);
3. Regulatory Efficiency (regulatory-efficiency) (business freedom, labor freedom, monetary freedom);
and
4. Open Markets (open-markets) (trade freedom, investment freedom, financial freedom).
Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A
country's overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
Detailed information about the methodology used to score each component is contained in the appendix.

Q.4. Which components of economic freedom are most important?

In the Index of Economic Freedom, the ten components of economic freedom are weighted equally in
determining country scores. For a country considering economic reforms, those components on which it
scores the lowest are likely to be the most important in terms of providing significant opportunities for
improving economic performance.

Q.5. What is your period of study?

For the 2013 Index of Economic Freedom, the authors generally examined data for the period covering the
second half of 2011 through the first half of 2012. To the extent possible, the information considered for each
factor was current as of June 30, 2012. It is important to understand, however, that some factors are based
on historical information. For example, the monetary policy factor is a 3-year weighted average rate of
inflation from January 1, 2009, to December 31, 2011. Other factors are current for the year in which the Index
is published. For example, the taxation variable for this Index considers tax rates that apply to the taxable
year 2012.

Q.6. Can I access the data online?

The Heritage Foundation's website offers an interactive edition of the Index rankings and scores (Explore the
Data) (explore). This feature allows anybody to rank countries by a specific factor (e.g. how well does my
country score solely in terms of its trade policy?); it also allows users to see how economic freedom changed
in a particular country or particular region since 1995, when the Index started.

2013 by The Heritage Foundation. All Rights Reserved.

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