RIGA - A Washington think tank issued its annual report on economic freedom last month, ranking Estonia a surprising 16th among the 123 nations surveyed for the study.
Issued by the Cato Institute, the report - Economic Freedom of the World - aims to measure how nations have developed in terms of providing freedom of economic choice for its citizens.
The report uses 38 variables to gauge the size of government, legal structure, access to finance, freedom to exchange with foreigners and business regulation on a 10-point scale (10 being the highest).
Hong Kong was found to be the freest economic zone across the globe, having received a ranking of 8.6. Singapore was second with 8.5, followed by the United States (8.3). New Zealand and England were tied for fourth place with 8.2 points each.
Estonia, which received a score of 7.5, is economically far freer than not only its Baltic neighbors but major European economies as well, according to the report. While Estonia ranked 16th, Germany (20), Italy (35) and France (44) were found to provide less economic freedom for their citizens.
Latvia, which scored 6.6, was ranked 51, while Lithuania was placed in 69th place with 6.2 points.
The average for all countries surveyed was 6.35.
Incredibly, Estonia jumped from 41st to 16th place in the span of a year, while Latvia jumped from 55th in 2002.
Lithuania actually fell one notch over the year between reports.
In the 2003 report, Estonia received several perfect 10s, including for private ownership of banks, taxes on international trade and lack of government enterprise.
In ease of starting a new business, the Cato Institute gave Estonia a 7.6, compared with a 4.6 for Latvia and a measly 3.8 for Lithuania.
Most of the lowest ranking countries were located in sub-Saharan Africa and Latin America or were former communist states, such as Russia, which was ranked 112.
The report contained a few surprises. For instance, Botswana, a sub-Saharan nation that has significant reserves of raw materials, including diamonds, ranked 26th in the report, placing it on the same level as Norway and Japan.
As the think tank stated in a press release, Botswana boasts a GDP per capita of $3,950 compared with $564 for the rest of sub-Saharan Africa.
"Economic freedom is demonstrably good for the poor, who are far better off in economically free countries than in less free countries," said Ian Vasquez, director of the Cato Institute's Project on Global Economic Liberty.
A nonprofit public policy research foundation launched in 1977 that is self-described as libertarian, the Cato Institute aims to limit the size of government, improve individual liberty and strengthen peace.