2015 Economic Freedom, Japan

Riley Walters

Free

rank	country	overall	change		rank	country	overall	change
1	Hong Kong	89.6	-0.5		4	Australia	81.4	-0.6
2	Singapore	89.4	0.0		5	Switzerland	80.5	-1.1
3	New Zealand	82.1	+0.9

 

Mostly Free

 

rank	country	overall	change		rank	country	overall	change
6	Canada	79.1	-1.1		21	Luxembourg	73.2	-1.0
7	Chile	78.5	-0.2		22	Georgia	73.0	+0.4
8	Estonia	76.8	+0.9		23	Sweden	72.7	-0.4
9	Ireland	76.6	+0.4		24	Czech Republic	72.5	+0.3
10	Mauritius	76.4	-0.1		25	United Arab Emirates	72.4	+1.0
11	Denmark	76.3	+0.2		26	Iceland	72.0	-0.4
12	United States	76.2	+0.7		27	Norway	71.8	+0.9
13	United Kingdom	75.8	+0.9		28	Colombia	71.7	+1.0
14	Taiwan	75.1	+1.2		29	South Korea	71.5	+0.3
15	Lithuania	74.7	+1.7		30	Austria	71.2	-1.2
16	Germany	73.8	+0.4		31	Malaysia	70.8	+1.2
17	The Netherlands	73.7	-0.5		32	Qatar	70.8	-0.4
18	Bahrain	73.4	-1.7		33	Israel	70.5	+2.1
19	Finland	73.4	0.0		34	Macau	70.3	-1.0
20	Japan	73.3	+0.9		35	Saint Lucia	70.2	-0.5

 

Moderately Free

 

rank	country	overall	change		rank	country	overall	change
36	Botswana	69.8	-2.2		64	Portugal	65.3	+1.8
37	Latvia	69.7	+1.0		65	Rwanda	64.8	+0.1
38	Jordan	69.3	+0.1		66	Montenegro	64.7	+1.1
39	Brunei Darussalam	68.9	-0.1		67	Trinidad and Tobago	64.1	+1.4
40	Belgium	68.8	-1.1		68	Panama	64.1	+0.7
41	The Bahamas	68.7	-1.1		69	Kazakhstan	63.3	-0.4
42	Poland	68.6	+1.6		70	Turkey	63.2	-1.7
43	Uruguay	68.6	-0.7		71	Ghana	63.0	-1.2
44	Saint Vincent and the Grenadines	68.0	+1.0		72	South Africa	62.6	+0.1
45	Cyprus	67.9	+0.3		73	France	62.5	-1.0
46	Barbados	67.9	-0.4		74	Kuwait	62.5	+0.2
47	Peru	67.7	+0.3		75	Thailand	62.4	-0.9
48	Jamaica	67.7	+1.0		76	Philippines	62.2	+2.1
49	Spain	67.6	+0.4		77	Saudi Arabia	62.1	-0.1
50	Slovakia	67.2	+0.8		78	Samoa	61.9	+0.8
51	Costa Rica	67.2	+0.3		79	Madagascar	61.7	0.0
52	Armenia	67.1	-1.8		80	Italy	61.7	+0.8
53	Macedonia	67.1	-1.5		81	Croatia	61.5	+1.1
54	Hungary	66.8	-0.2		82	Kyrgyz Republic	61.3	+0.2
55	Bulgaria	66.8	+1.1		83	Paraguay	61.1	-0.9
56	Oman	66.7	-0.7		84	Vanuatu	61.1	+1.6
57	Romania	66.6	+1.1		85	Azerbaijan	61.0	-0.3
58	Malta	66.5	+0.1		86	Dominican Republic	61.0	-0.3
59	Mexico	66.4	-0.4		87	Guatemala	60.4	-0.8
60	Cabo Verde	66.4	+0.3		88	Slovenia	60.3	-2.4
61	Dominica	66.1	+0.9		89	Morocco	60.1	+1.8
62	El Salvador	65.7	-0.5		90	Serbia	60.0	+0.6
63	Albania	65.7	-1.2

 

 Mostly Unfree

 

rank	country	overall	change		rank	country	overall	change
91	Swaziland	59.9	-1.3		122	Kenya	55.6	-1.5
92	Uganda	59.7	-0.2		123	Guyana	55.5	-0.2
93	Namibia	59.6	+0.2		124	Egypt	55.2	+2.3
94	Lebanon	59.3	-0.1		125	Mozambique	54.8	-0.2
95	Tonga	59.3	+1.1		126	Malawi	54.8	-0.6
96	Mongolia	59.2	+0.3		127	Niger	54.6	-0.5
97	Bosnia and Herzegovina	59.0	+0.6		128	India	54.6	-1.1
98	Fiji	59.0	+0.3		129	Suriname	54.2	0.0
99	Benin	58.8	+1.7		130	Greece	54.0	-1.7
100	Zambia	58.7	-1.7		131	Bangladesh	53.9	-0.2
101	Sri Lanka	58.6	-1.4		132	Burundi	53.7	+2.3
102	Burkina Faso	58.6	-0.3		133	Yemen	53.7	-1.8
103	Côte d'Ivoire	58.5	+0.8		134	Maldives	53.4	+2.4
104	Gabon	58.3	+0.5		135	Mauritania	53.3	+0.1
105	Indonesia	58.1	-0.4		136	São Tomé and Príncipe	53.3	+4.5
106	Senegal	57.8	+2.4		137	Papua New Guinea	53.1	-0.8
107	Tunisia	57.7	+0.4		138	Togo	53.0	+3.1
108	Nicaragua	57.6	-0.8		139	China	52.7	+0.2
109	Tanzania	57.5	-0.3		140	Tajikistan	52.7	+0.7
110	Cambodia	57.5	+0.1		141	Liberia	52.7	+0.3
111	Moldova	57.5	+0.2		142	Comoros	52.1	+0.7
112	Djibouti	57.5	+1.6		143	Russia	52.1	+0.2
113	The Gambia	57.5	-2.0		144	Guinea	52.1	-1.4
114	Seychelles	57.5	+1.3		145	Guinea-Bissau	52.0	+0.7
115	Bhutan	57.4	+0.7		146	Cameroon	51.9	-0.7
116	Honduras	57.4	+0.3		147	Sierra Leone	51.7	+1.2
117	Belize	56.8	+0.1		148	Vietnam	51.7	+0.9
118	Brazil	56.6	-0.3		149	Ethiopia	51.5	+1.5
119	Mali	56.4	+0.9		150	Laos	51.4	+0.2
120	Nigeria	55.6	+1.3		151	Haiti	51.3	+2.4
121	Pakistan	55.6	+0.4		152	Nepal	51.3	+1.2

 

Repressed

rank	country	overall	change		rank	country	overall	change
153	Belarus	49.8	-0.3		166	Central African Republic	45.9	-0.8
154	Micronesia	49.6	-0.2		167	Timor-Leste	45.5	+2.3
155	Lesotho	49.6	+0.1		168	Democratic Republic of Congo	45.0	+4.4
156	Ecuador	49.2	+1.2		169	Argentina	44.1	-0.5
157	Algeria	48.9	-1.9		170	Republic of Congo	42.7	-1.0
158	Angola	47.9	+0.2		171	Iran	41.8	+1.5
159	Solomon Islands	47.0	+0.8		172	Turkmenistan	41.4	-0.8
160	Uzbekistan	47.0	+0.5		173	Equatorial Guinea	40.4	-4.0
161	Burma	46.9	+0.4		174	Eritrea	38.9	+0.4
162	Ukraine	46.9	-2.4		175	Zimbabwe	37.6	+2.1
163	Bolivia	46.8	-1.6		176	Venezuela	34.3	-2.0
164	Kiribati	46.4	+0.1		177	Cuba	29.6	+0.9
165	Chad	45.9	+1.4		178	North Korea	1.3	+0.3

 

Not Ranked

rank	country	overall	change		rank	country	overall	change
N/A	Afghanistan	N/A	N/A		N/A	Liechtenstein	N/A	N/A
N/A	Iraq	N/A	N/A		N/A	Somalia	N/A	N/A
N/A	Kosovo	N/A	N/A		N/A	Sudan	N/A	N/A
N/A	Libya	N/A	N/A		N/A	Syria	N/A	N/A

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Index of Economic Freedom was first published more than 20 years ago. Scoring a 73.3, Japan ranks 20th in the world for economic freedom, an improvement over the previous year’s rank of 25. It continues to rank sixth among countries in the Asia–Pacific region. Focusing on needed structural reforms will help Japan to continue on its path to economic freedom.



Abenomics
Monetary freedom, fiscal freedom, and freedom from corruption continued to weight down Japan’s score by a combined negative of 5.1 points. Over the past year, the first two arrows of Prime Minister Shinzo Abe’s three-arrow economic policy “Abenomics”—monetary and fiscal policy—enabled Japan’s debt to grow to more than double Japan’s gross domestic product. Japan’s fiscal freedom and government spending are categorized as only moderately free because they rank at 144th and 137th, respectively, in the world.
Meanwhile, Japan improved in labor, business, and trade freedom. The largest increase was in Japan’s labor freedom with a gain of more than 10 points. The third arrow of Abenomics—structural reform, including encouraging more women and immigrants to participate in the workforce—helped labor freedom to rank the ninth freest in the world. Japan currently has a tight labor market with one of the lowest rates of unemployment in the world at 3.5 percent. As Japan’s population continues to shrink, its job market continues to supply at least one job for every applicant.
Reigniting Japan’s Economy
While the government has made significant progress toward Prime Minister Abe’s planned structural reforms, there are still concerns over how far he will follow through with his commitments. Bank of Japan Governor Haruhiko Kuroda continues to purchase government bonds at an alarming rate of $70 billion to $100 billion per month, pushing up prices while devaluing the yen. Implementing monetary and fiscal policy reform has been relatively easy, but Japan needs structural reform to reignite its economy.
The 2015 Index of Economic Freedom, along with other countries’ rankings, can be found at www.heritage.org/index