Economic freedom: 122 nations, Pakistan beat India!

The world economy is in trouble, and governments are making things worse, says the 2012 Index of Economic Freedom published by the Heritage Foundation and The Wall Street Journal.

The Heritage Foundation, in partnership with The Wall Street Journal has tracked economic freedom around the world since a decade.

According to the study, Pakistan has beat India and China in economic freedom.

India (Rank 123)

India's score is unchanged from last year, with an improvement in labour freedom offset by declining scores in five other areas including business freedom, freedom from corruption, government spending, and monetary freedom.

India is ranked 25th out of 41 countries in the Asia-Pacific region, and its overall score is below the world average.

Despite India's high economic growth, the foundations for long-term economic development remain fragile in the absence of an efficiently functioning legal framework, says the 2012 Index of Economic Freedom.

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Pakistan (Rank 122)
Score: 54.7

Pakistan's economic freedom score is 0.4 point lower than last year, with declines in freedom from corruption and investment freedom. Pakistan is ranked 24th out of 41 countries in the Asia–Pacific region, and its overall score is below the world and regional averages.

The Pakistani government has demonstrated little commitment to much-needed economic reform, says the 2012 Index of Economic Freedom.  

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China (Rank 138)
Score: 51.2

China's economic freedom score is 0.8 point lower than last year, reflecting worsening performance in business freedom and government spending.

China is ranked 30th out of 41 countries in the Asia-Pacific region, and its overall score is lower than the global and regional averages.

Economic freedom in China rests on fragile foundations. The judicial system is vulnerable to political influence and Communist Party directives, and corruption is perceived as widespread, says the 2012 Index of Economic Freedom.

Click NEXT to see the 20 countries that top in economic freedom...

Hong Kong (Rank 1)
Score: 89.9

Hong Kong has the freest economy in the 2012 Index. Its overall score is 0.2 point higher than last year, with improvements in freedom from corruption and the control of government spending partially offset by a small decline in monetary freedom, says the 2012 Index of Economic Freedom.

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Singapore (Rank 2)
Score: 87.5

Singapore's score is slightly higher than last year, reflecting gains in freedom from corruption and financial freedom that offset losses in labour and monetary freedom.

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Australia (Rank 3)
Score: 83.1

Its overall score is 0.6 point higher than last year, reflecting better scores in trade freedom, government spending, and fiscal freedom

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New Zealand (Rank 4)
Score: 82.1

New Zealand's economic freedom score is 0.2 point worse than last year, reflecting modest declines in investment freedom and the control of government spending that offset an improvement in fiscal freedom. 

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Switzerland (Rank 5)
Score: 81.1

Switzerland's economic freedom score has dropped by 0.8 point since last year, with declines in freedom from corruption, business freedom, and the score for government spending. 

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Canada (Rank 6)
Score: 79.9

Canada's score is 0.9 point lower than last year, reflecting worsening scores for government size and monetary freedom.

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Chile (Rank 7)
Score: 78.3

Chile's economic freedom is 0.9 point better than last year due to improved scores in property rights, freedom from corruption, and monetary freedom.

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Mauritius (Rank 8)
Score: 77

Mauritius's overall score is 0.8 point higher than last year, with improvements in property rights, monetary freedom, and the management of government spending. 

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Ireland (Rank 9)
Score: 76.9

Ireland's score decreased by 1.8 points from last year, reflecting poorer management of government spending and reduced monetary freedom.

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United States (Rank 10)
Score: 76.3

The United States' economic freedom score dropped to 10th place in the 2012 Index.

Its score is 1.5 points lower than last year, reflecting deteriorating scores for government spending, freedom from corruption, and investment freedom.

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Denmark (Rank 11)
Score: 76.2

Denmark's overall score is 2.4 points lower than last year, reflecting considerable deterioration in public finance management.

Denmark is ranked 3rd out of 43 countries in the Europe region.

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Bahrain (Rank 12)
Score: 75.2

Bahrain's overall score is 2.5 points worse than last year due to score declines in six of the 10 economic freedoms, including freedom from corruption, property rights, and government spending.

Bahrain is ranked 1st out of 17 countries in the Middle East/North Africa (MENA) region.

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Luxembourg (Rank 13)
Score: 74.5

Luxembourg's overall score is 1.7 points worse than last year, reflecting declines in regulatory efficiency and control of government spending.

The country is ranked 4th out of 43 countries in the Europe region. Luxembourg has long benefited from a favourable climate for entrepreneurial activity and high levels of openness and flexibility.

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United Kingdom (Rank 14)
Score: 74.1

The United Kingdom's score is 0.4 point lower than last year, reflecting primarily a deterioration in the management of government spending.

It is ranked 5th out of 43 countries in the Europe region, and its overall score is much higher than the world average.

The British economy continues to underperform, with average annual growth of less than 1 percent over the past five years, says the 2012 Index of Economic Freedom..

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The Netherlands (Rank 15)
Score: 73.3

The Netherlands' economic freedom score is 1.4 points worse than last year due to significant deterioration in the control of public spending.

The Netherlands is ranked 6th out of 43 countries in the Europe region, and its overall score is above the world and regional averages.

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Estonia (Rank 16)
Score: 73.2

Estonia's economic freedom score is 2.0 points lower than last year as a result of declines in freedom from corruption and business freedom and a deteriorating score for government spending.

The country is ranked 7th out of 43 countries in the Europe region, and its overall score is well above the regional and world averages.

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Finland (Rank 17)

Score: 72.3

Finland's economic freedom score is 1.7 points worse than last year, with considerable deterioration in the management of government spending.

Finland is ranked 8th out of 43 countries in the Europe region, and its overall score is well above the world average.

The strong competitiveness of Finland's economy is built on openness and transparency, says the 2012 Index of Economic Freedom.

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Taiwan (Rank 18)

Score: 71.9

Taiwan's economic freedom score is 1.1 points higher than last year, with improvements in six of the 10 economic freedoms including business freedom and government spending.

Taiwan is ranked 5th out of 41 economies in the Asia–Pacific region, and its overall score is higher than the world average.

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Macau (Rank 19)
Score: 71.8

Macau's economic freedom score is making its economy the 19th freest in the 2012 Index.

Its overall score is 1.3 points worse than last year, mainly due to declines in labour freedom, freedom from corruption, and the control of government spending.

As a free port, Macau has long benefited from global trade and investment.

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Cyprus (Rank 20)
Score: 71.8

Cyprus's economic freedom score is down by 1.5 points from last year, with significant declines in property rights, freedom from corruption, and public finance management.

Cyprus is ranked 9th out of 43 countries in the Europe region.