The Cato Institute and Fraser Institute have published their annual report on Economic Freedom of the World. As always it is interesting stuff. One can of course always debate the methods used to rank different countries in Economic Freedom ranking, but I nonetheless think it gives a pretty fair description of the overall tendencies.
One thing I always like to look at is the relative ranking of the Nordic countries versus the US. Interestingly enough all of the Nordic countries tend to rank as very economically free in both the Cato/Fraser rankings and in the similar ranking from the Heritage Foundation. This is despite the fact that the Nordic countries have very large public sectors and a high level of taxation. However, that is generally more than “compensated” by low levels product and labour market regulation and very open economies with free movement of capital and goods.
This is the 2013-ranking for the US and the Nordic countries:
(17) United States
So there you go – both Denmark and Finland are more economically free than the US at least according to Cato/Fraser.
I sure that a lot of Danish libertarians and conservatives would object to Denmark high ranking and they would undoubtedly stress that it is impossible to argue Denmark is more “economically free” than the US due to the fact that the Danish public sector is among the largest public sectors in the world and level of taxation is very high in Denmark. However, looking in all other areas Denmark is indeed a very free economy.
I am looking forward to comments from both Danes and Americans. Is Fraser and Cato right?