Page 22 - Policy Economic Report - July 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Lessons from Economics

Index of Economic Freedom

The Heritage Foundation publishes an annual Index of Economic Freedom, which ranks countries from
"free" to "repressed." Singapore ranked first, and the United States ranked 25th in 2023

An index of economic freedom is a composite measure of the quality of political-economic institutions
across different jurisdictions. It scores and ranks an index based on criteria such as property rights and tax
burden. Economies based on a free market tend to experience greater levels of investment, more rapid
growth, and higher average incomes.

The Heritage Foundation's Index of Economic Freedom is one of the most popular indexes, scoring
countries based on 12 factors:

• Property rights

• Judicial effectiveness

• Government integrity

• Tax burden

• Government spending

• Fiscal health

• Business freedom

• Labor freedom

• Monetary freedom

• Trade freedom

• Investment freedom

• Financial freedom

The Heritage Foundation's Index of Economic Freedom has highlighted correlations that encourage
nations to improve their scores over time. A common observation is that people living in countries
categorized as free or mostly free enjoy higher incomes than those living in lower-scoring nations. There
is also a correlation between economic freedom and GDP growth, as well as a higher standard of living and
a general rule of law for citizens.

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