Israel has dropped one place in international rankings on economic freedom, according to the Economic Freedom of the World: 2019 Annual Report by the Jerusalem Institute for Market Studies in conjunction with the Fraser Institute of Canada.
According to the report, Israel is ranked 38 in terms of economic freedom among 162 countries and territories nationwide, a drop of one place since the last report was issued.
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The rankings gave Israel a score of 7.53 out of 10 for economic freedom, which was lower than the average score in OECD countries.
The nations that earned the top rankings for economic freedom were Hong Kong and Singapore, followed by New Zealand, Switzerland, the US, Ireland, Britain, Canada, Australia, and Mauritius.
The nations whose economic freedom was ranked lowest included Iraq, Egypt, Syria, the Democratic Republic of Congo, Sudan, Libya, and Venezuela.
The rankings of the report were based on data from 2017 and evaluated five main categories: government size (public expenditure on government), the legal system and property rights, sound money, freedom to trade internationally, and regulation.
For sound money, Israel scored 9.38. The more problematic areas were in government size, a category in which Israel was ranked 82nd, with a score of 6.47. However, since 1980, Israel has steadily improved in that category since 1980, when the economy was almost entirely controlled by the government and Israel received a particularly low ranking of 2.33. In 2015, Israel was given a score of 6.31.
In the legal system and property rights category, Israel was scored 6.2.
For regulation, Israel was ranked 62nd. Israel performed worst when it came to the labor market, where it was ranked 121 on the list.
Generally speaking, a high level of economic freedom benefits most citizens. In 2017, the per capita gross domestic product of the nations in the top quartile of the rankings stood at $36,700 per year – six times that of the countries in the bottom quartile of the rankings. Likewise, the percentage of the population living in extreme poverty, (defined as $1.90/day) in the countries with the most economic freedom was only 1.8%, compared to 27.2% in the countries with the least economic freedom.
Corinne Parenti, co-founder and director of the Jerusalem Institute for Market Studies, told Israel Hayom that "the next government needs to focus mainly on removing regulatory obstacles and reducing government intervention in the market."
