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Countries on the spectrum.

The tiers below are institutional families: a qualitative judgment about how each system is built. The scores are a quantitative overlay from the 2026 Index of Economic Freedom.

Heritage Foundation, 176 countries scored, edition published February 2026. Exactly four countries rate Free, meaning 80 or above, in 2026: Singapore at 84.4, Switzerland at 83.7, Ireland at 83.3, and Australia at 80.1, with Taiwan just under at 79.8. The two lenses sometimes disagree, and the disagreements are the most instructive part of the page.

The secondary index for cross-checking is the Fraser Institute's Economic Freedom of the World. Its latest edition is the 2025 Annual Report, using 2023 data, and it ranks Hong Kong, Singapore, New Zealand, Switzerland, and the United States as the five most economically free jurisdictions, a different top order from Heritage because the two use different methods and data years.

Scores use the 2026 Index of Economic Freedom throughout. Band codes refer to the spectrum.

Tier 1

Closest to the model.

Honesty box

No pure capitalist country exists, and this page does not pretend otherwise. These are the economies that score closest to the center band on measured rules for business, each with caveats we state rather than hide.

C-adjacent, Tier 1

Singapore

2026 Index: Ranked 1, 84.4
State's role: The freest economy on the standard index is also one where the state owns roughly 90 percent of the land, by academic estimates, and the sovereign funds Temasek and GIC hold commanding stakes.
Signature fact: About three-quarters of residents, 76 percent in the 2024 financial year, live in government-built HDB housing, and savings are compulsory through the CPF.
Why this tier: The index measures rules for business, not the state's footprint in assets; pure capitalism is elusive even at the top of the table.

C-adjacent, Tier 1

Switzerland

2026 Index: Ranked 2, 83.7
State's role: Decentralized federalism, a constitutional debt brake, and referendums that let voters veto the government's spending ambitions.
Signature fact: Much of the welfare state runs through mandatory private insurance rather than state provision.
Why this tier: Deep market freedom with the state holding the rules rather than the assets.

C-adjacent, Tier 1

Ireland

2026 Index: Ranked 3, 83.3
State's role: The FDI magnet: a 12.5 percent corporate tax rate held for decades, now 15 percent under the OECD global minimum.
Signature fact: A small open economy that made tax policy its industrial policy.
Why this tier: Market-friendly rules drew the capital; the state competed on tax rather than ownership.

C-adjacent, Tier 1

Taiwan

2026 Index: Ranked 5, 79.8
State's role: Graduated from an L3 developmental state to near-free markets inside four decades.
Signature fact: TSMC, the most strategically important company on earth, is the legacy of earlier state steering.
Why this tier: Even Tier 1 carries industrial-policy fingerprints.

C-adjacent, Tier 1

New Zealand

2026 Index: Ranked 12, 77.8
State's role: The great deregulation story: Rogernomics after 1984 dismantled one of the rich world's most controlled economies, including nearly all farm subsidies.
Signature fact: New Zealand farmers now defend the abolition of their own subsidies.
Why this tier: A deliberate move toward the center band, sustained across decades.

Watch entry

Argentina

2026 Index: Ranked 106, 57.4, up 3.2 points, the largest single-year gain in the 2026 edition. On the quarterly review list.
State's role: A fiscal and regulatory program under President Milei aimed at jumping bands rightward.
Signature fact: The 2026 Index's largest single-year gain, up 3.2 points.
Why this tier: The site's standing example that band position is a policy choice, not a destiny.

Tier 2

The Anglosphere family (band L1, capitalism like ours).

These share the liberal-market-economy build: deep capital markets, flexible labor, shareholder primacy, and a moderate safety net.

L1, Tier 2

United States

2026 Index: Ranked 22, 72.8
State's role: Rule-setter, macroeconomic manager, and insurer of last resort atop dominant private ownership.
Signature fact: Covered in full on its own page.
Why this tier: The liberal market economy build, with recurring industrial-policy episodes.

L1, Tier 2

United Kingdom

2026 Index: Ranked 29, 70.4
State's role: A liberal market economy with one large L2 exception layered on top.
Signature fact: Birthplace of industrial capitalism, and home to the NHS, a fully state-run health service inside an otherwise liberal market economy.
Why this tier: Liberal-market build despite a single large state-run sector.

L1, Tier 2

Canada

2026 Index: Ranked 14, 75.6
State's role: The American build with single-payer health insurance.
Signature fact: A more concentrated banking sector that skipped the 2008 failures.
Why this tier: Liberal-market economy with a distinctive banking structure.

L1 by family, Tier 1 by score

Australia

2026 Index: Ranked 4, 80.1
State's role: A liberal market economy that also clears the Free threshold on measured rules.
Signature fact: Compulsory superannuation, a market-based answer to the pension problem.
Why this tier: The overlap is deliberate: tiers measure institutional style, the index measures rules, and Australia proves they are different questions.

Tier 3

Capitalist, differently.

Social market family (band L2)

L2, Tier 3

Germany

2026 Index: 2026 Index of Economic Freedom
State's role: Ordoliberalism: the state as designer and enforcer of the competitive order.
Signature fact: Codetermination puts workers on supervisory boards by law at large firms.
Why this tier: Free markets underneath, universal welfare and negotiated labor on top.

L2, Tier 3

Denmark

2026 Index: Ranked 7, 79.0
State's role: Flexicurity: easy to fire, generous to the fired, and aggressive about retraining.
Signature fact: Denmark's then prime minister publicly rejected the socialist label at Harvard in 2015 and called Denmark a market economy.
Why this tier: The cleanest demonstration that tax-and-transfer size and market freedom are separate dials.

L2, Tier 3

Sweden

2026 Index: 2026 Index of Economic Freedom
State's role: No statutory minimum wage, school vouchers, and private providers inside universally funded welfare.
Signature fact: Swung hard toward markets after its early-1990s banking crisis.
Why this tier: Market mechanisms threaded through a universal welfare state.

L2, Tier 3

Netherlands

2026 Index: 2026 Index of Economic Freedom
State's role: The polder model of negotiated wage restraint.
Signature fact: Pension assets among the largest on earth relative to GDP.
Why this tier: Coordinated bargaining atop private markets.

Developmental heritage (band L3)

L3 heritage, now near L1

Japan

2026 Index: 2026 Index of Economic Freedom
State's role: MITI-guided catch-up growth, then three decades of managing maturity.
Signature fact: Cross-shareholding keiretsu networks blurred the line between market and plan.
Why this tier: Developmental muscle memory inside a now largely liberal market economy.

L3 heritage, Tier 3

South Korea

2026 Index: 2026 Index of Economic Freedom
State's role: Five-year plans plus chaebol champions took it from postwar poverty to the rich world inside two generations.
Signature fact: Samsung Electronics alone accounts for a double-digit share of national exports, about 20 percent in 2019.
Why this tier: The developmental state that graduated, with its champions intact.

State capitalist family (band L4)

L4, featured case study

China

2026 Index: 48.3, deep in Repressed
State's role: Owner, banker, planner, and referee at once, running markets inside the state's hand.
Signature fact: The most dynamic market competition on earth coexists with minimal economic freedom as the indices define it.
Why this tier: The indices measure freedom from the state, and the Chinese model runs markets inside the state's hand.

L4, Tier 3

Vietnam

2026 Index: 2026 Index of Economic Freedom
State's role: Party control plus market reform plus export manufacturing.
Signature fact: Doi moi (1986): the China path at smaller scale.
Why this tier: State direction over a fast-growing private export economy.

L4, sovereign-wealth variant

Saudi Arabia and the UAE

2026 Index: 2026 Index of Economic Freedom
State's role: The state does not just regulate capital, it is the capitalist.
Signature fact: Oil rents recycled through funds like PIF, ADIA, and Mubadala into everything from airlines to football, with Vision 2030 as state-led diversification.
Why this tier: Ownership of the commanding heights sits with the state and its funds.

L4, oligarchic variant

Russia

2026 Index: 50.3
State's role: Ownership private in name, political in fact: fortunes exist at the state's pleasure.
Signature fact: The 2003 Yukos case as the moment the rule was demonstrated.
Why this tier: Its 2026 score sits beside China's, and control runs through political loyalty.