The United States has plummeted in the rankings since the year 2000, when it stood in second place. This decline is largely thanks to a weakening of the rule of law, increasing regulation, and the devastating effects of the wars on terrorism and drugs. Hong Kong, Singapore, New Zealand, and Switzerland led the rankings. The least economically free countries were Iran, Algeria, Chad, Guinea, Angola, the Central African Republic, Argentina, the Republic of the Congo, Libya and, in last place, Venezuela. The United States is not the only large economy lacking in economic freedom — Germany came in at number 30, France at 57, Italy 69, Russia 102, and India and China at 112 and 113.

The index demonstrates that economic freedom matters — nations in the top quartile of economic freedom enjoyed an average per capita GDP of $41,228 in 2014, compared to just $5,471 for countries in the bottom quartile. The income of the poorest 10 percent of the population was also much higher in countries with more economic freedom. Life expectancy was over 80 years in the top quartile, compared to just 64 in the bottom, and political and civil liberties were significantly higher in the more economically free countries.

This year’s edition of the index takes a close look at Ireland, Venezuela, and the United States, as well as at the relationship between gender disparity and economic freedom.