The 2018 Index of Economic Freedom is out. It delivers some good and some bad news. The bad news is that the US, at number 18, doesn’t make the cut of the first-class “free” countries but comes in as “mostly free.” The good news is that it’s no longer dropping as it has been for years. In fact, part of why we finished in eighteenth-place is that several other countries have improved their score since last year.

That’s all to the good. Economic freedom is not a zero-sum game where more freedom in one country leaves another country with less. It would be nice if every country’s score improved every year. It’s not a race with just one winner.

Economic freedom is not a zero-sum game where more freedom in one country leaves another country with less. It would be nice if every country’s score improved every year. It’s not a race with just one winner.

In fact, the world average has also inched up, from 60.9% to 61.1%. That suggests that panic about the rise of populism might be overblown. And the US’s absolute score, 75.7%, is up even more than the world average from last year’s score of 75.1%. That should help calm the fears of some, like yours truly, who worried about President Trump launching a trade war.

What’s in our Score?

Why the slight improvement? The Index notes, “There are signs of renewed labor market dynamism and increased growth, and major regulatory and tax reforms are spurring business confidence and investment.” In other words, much of the gain is promissory. We may not see the full benefit of the drop in the corporate income tax rate until next year.

And then there is Trump’s “regulatory freeze,” which he announced as soon as he had taken office. Regulation in 2017 slowed “to a crawl,” compared to the decade that preceded him. This may be the most important thing the president has done for the economy. Still, it’s one thing to slow regulatory creep. It’s another thing to cut it back. Let’s hope that this year he takes a machete to regulatory weeds that are still choking the economy.

Why aren’t we higher on the Index? In part, as mentioned, it’s because some other countries have improved faster than we have. But it’s also because of lingering problems in our economy, from government spending to corruption. “The continuing decline in the score for government integrity,” the Index explains, “reflects a growing perception of cronyism, elite privilege, and corruption.” Collusion between big business and government isn’t free enterprise.

In 2018, keep an eye on talk of “infrastructure” spending. Not only could this swell our ballooning federal deficit. It could also be a golden opportunity for more “partnerships” between private business and government. In other words, cronyism.

The Top Ten

So who took the top spots? As usual, Hong Kong comes in first. It’s followed by another Asian country, Singapore.

There are some telling patterns in this group. See if you can spot them:

First, notice that seven of the ten are from the Anglosphere, that is, England or former English colonies (that includes Singapore and Hong Kong).

Second, almost all of these are small countries. Hong Kong (with 7.4 million people and Singapore (5.6 million) are really city states. For whatever reason, the People’s Republic of China has let Hong Kong continue to prosper, so the Index counts it separately from the rest of China.

Estonia has a population smaller than either of the Asian city states. This tiny Baltic state has only 1.3 million people. A third of them live in the capital of Tallinn.

New Zealand and Ireland are both around 4.7 million. Switzerland weighs in at 8.3 million, and the United Arab Emirates with about 9.3 million. That leaves three larger countries: Australia, with 24 million; Canada, with 36 million; and the UK, which has just over 65 million people.

Bigger Isn’t Always Better

It’s the same story for the second group — from 11^th to 17^th place. Tiny countries such as Iceland, Demark, and Luxembourg show up ahead of the US.

As a result, the US is very much an outlier in 18^th place. It’s by far the largest country in the top 100. There are over 323 million people in our country. That’s about five times larger than the UK and nine times larger than Canada.

The only two countries larger than the US, India and China, are “mostly unfree.”

Of course, there are lots of repressive smaller countries. North Korea comes to mind. It’s dead last in this year’s Index. But it’s hard not to notice how different the US is from other countries. We are the third largest country in the world by population, and yet we are “mostly free” economically, and slowly improving.

Perhaps it’s easier to enjoy economic freedom in small than in large countries. If so, then we’re doing pretty well in the US, given the alternatives.

Jay Richards is the Executive Editor of The Stream and an Assistant Research Professor in the Busch School of Business and Economics at the Catholic University of America. Follow him on Twitter.