Market Economy Countries 2022

An economy based on free-market principles is one in which the forces of supply and demand set the pricing of products and services for individuals, small enterprises, and the consumers who use them.

They then influence choices in sectors like investment, manufacturing, and distribution in the economy. In a free market, businesses have the freedom to flourish or fail, and the competition that results pushes both innovation and efficiency improvements.

A command economy, where the government sets the price, supply, and distribution of most commodities, is common in socialist and communist nations.

In contrast, a market economy is more common in capitalist countries. Market economies have six basic qualities that allow them to thrive and operate effectively:

The following six characteristics define market economies:

1. Private property
2. Freedom of choice
3. Motive of self-interest
4. Competition
5. System of markets and prices
6. Limited government

In most countries, government subsidies for failing or young companies, price caps on utility bills, and “public goods” (roads, military defenses, universal health care) are all common, making it difficult to find a truly free market economy.

Consequently, today’s industrialized nations have a hybrid economy that combines the free market and central planning features.

Economic stability, equity, and long-term advantages may be achieved via various free markets and central planning combinations. Economists generally believe that market-oriented economies are healthier and more efficient than command economies.

Countries with a market economy

There are no free-market economies in the world, although certain mixed economies have a more free-market structure than others.

According to the Fraser Institute’s Economic Freedom of the World Rankings, Taiwan, Hong Kong, Singapore, New Zealand, and Switzerland were the five nations with the highest economic freedom in 2021.

Personal choice rather than communal decision-making, voluntary trade organized by markets, freedom to participate and compete in markets, and protection of individuals and their property are the pillars of economic freedom in this study.

These are the world’s twenty-five most economically liberated nations as of 2021:

1. Taiwan (Republic of China) — 9.02
2. Hong Kong (China SAR) — 8.91
3. Singapore — 8.81
4. New Zealand — 8.56
5. Switzerland — 8.48
6. Georgia — 8.26
7. United States — 8.24
8. Ireland — 8.21
9. Lithuania — 8.21
10. Australia — 8.20
11. Denmark — 8.17
12. Mauritius — 8.16
13. United Kingdom — 8.15
14. Estonia — 8.11
15. Canada — 8.06
16. Malta — 8.03
17. Armenia — 8.03
18. Japan — 7.98
19. Latvia — 7.94
20. Finland — 7.92
21. Germany — 7.91
22. Iceland — 7.90
23. Spain — 7.89
24. Cyprus — 7.89
25. Romania — 7.88
26. Czech Republic — 7.87

Also See: Major Countries Currencies 2022

For mixed economies that lean more toward a government-managed economy, Cuba, China, and North Korea are examples.