Finland is ranked ninth in the world and second in Europe in the 2012 Economic Freedom of the World report co-published by the Fraser Institute and the Libera Foundation, improving its position by two places from last year.
The index measures the degree to which the policies and institutions of countries are supportive of economic freedom, defined in terms of personal choice, voluntary exchange, freedom to compete, and security of privately owned property.
Economic freedom correlates with higher investment rates
Finland is ranked the best in the world for its legal system and property rights, credit market regulations, and in fourth place for business regulations. According to the report, Finland improved its performance in the areas of property rights, freedom to trade internationally, availability of sound money, and regulations concerning the credit market, labour market and business.
The report examines 42 variables are used to construct a summary index and to measure the degree of economic freedom in five broad areas: Size of Government, Legal System and Property Rights, Sound Money, Freedom to Trade Internationally, and Regulation. According to the report, countries with institutions and policies more consistent with economic freedom have higher investment rates, more rapid economic growth, higher income levels, and more rapid reductions in poverty rates.