Economic Freedom Index

Indicators

Sub-indicators

Sub-factorcs

1. RULE OF LAW

1.1 Property Rights

Physical property rights

Intellectual property rights

Strength of investor protection

Risk of expropriation

Quality of land administration

1.2 Judicial Effectiveness

Judicial independence

Quality of the judicial process

Favoritism in decisions of government officials

1.3 Government Integrity

Public trust in politicians

Irregular payments and bribes

Transparency of government policymaking

Absence of corruption

Perceptions of corruption

Governmental and civil service transparency

2. GOVERNMENT SIZE

2.1 Tax Burden

The top marginal tax rate on individual income

The top marginal tax rate on corporate income

The total tax burden as a percentage of GDP

2.2 Government Spending

Captures the burden imposed by government expenditures

2.3 Fiscal Health

Average deficits as a percentage of GDP for the most recent three years (80 percent of score)

Debt as a percentage of GDP (20 percent of score).

3. REGULATORY EFFICIENCY

3.1 Business Freedom

Starting a business—procedures (number);

Starting a business—time (days)

Starting a business—cost (% of income per capita)

Starting a business—minimum capital (% of income per capita)

Obtaining a license—procedures (number)

Obtaining a license—time (days)

Obtaining a license—cost (% of income per capita)

Closing a business—time (years)

Closing a business—cost (% of estate)

Closing a business—recovery rate (cents on the dollar)

Getting electricity—procedures (number)

Getting electricity—time (days)

Getting electricity—cost (% of income per capita)

3.2 Labor Freedom

Ratio of minimum wage to the average value added per worker

Hindrance to hiring additional workers

Rigidity of hours

Difficulty of firing redundant employees

Legally mandated notice period

Mandatory severance pay

Labor force participation rate

3.3 Monetary Freedom

The weighted average inflation rate for the most recent three years

Price controls

4. OPEN MARKETS

4.1 Trade Freedom

The trade-weighted average tariff rate

Nontariff barriers (NTBs)

4.2 Investment Freedom

National treatment of foreign investment

Foreign investment code

Restrictions on land ownership

Sectoral investment restrictions

Expropriation of investments without fair compensation

Foreign exchange controls

Capital controls

4.3 Financial Freedom

The extent of government regulation of financial services

The degree of state intervention in banks and other financial firms through direct and

indirect ownership

Government influence on the allocation of credit

The extent of financial and capital market development

Openness to foreign competition