Chile is #22

Being “Mostly Free” means Chile has a high degree of economic freedom, with strong trade openness, property rights, and an entrepreneurial environment, though some regulatory and policy barriers remain. Advancing to “Free” status would require reducing these constraints, improving fiscal efficiency, and increasing labor market flexibility to enhance prosperity further.

What categories doES Chile DO well in?

To perform well ("mostly free"), a country must score between 70 and 79.9. To be classified as excellent ("free"), a country must achieve a score of 80 or higher.  Chile scores relatively well in the following 8 out of 12 categories (scores out of 100):

​

• Judicial Effectiveness 87.9

• Business Freedom 79.2

• Monetary 70.9

• Property Rights 72.5

• Tax Burden 71.8

• Government Spending 73.4

• Trade Freedom 78.0

• Financial Freedom 70.0

​

Reflects a generally open market environment that supports business activities and economic stability.

Solutions

Chile’s weakest category, Labor Freedom, scored at 58.6 out of 100, measuring the flexibility of the labor market, regulations around hiring and firing, and the general ease of workforce management. This relatively low score reflects restrictive labor laws, which can discourage job creation, reduce hiring flexibility, and ultimately limit employment opportunities for Chileans. To improve this score, policymakers could consider reducing bureaucratic hurdles for hiring, loosening restrictions on contracts, and promoting flexible work arrangements to stimulate employment.

​

Investment Freedom in Chile stands at 60.0 out of 100, which assesses the ease of domestic and foreign investments in the country. This score points to lingering restrictions on certain types of investments and potential regulatory hurdles, which can deter foreign investors and limit capital flow into Chile. Enhancing this score could involve removing specific barriers to entry for foreign investments, creating clearer, more predictable regulations, and promoting policies that increase investor confidence.

​

Chile’s Fiscal Health score is 66.0 out of 100, which measures the country's debt levels and overall fiscal stability. While relatively moderate, this score suggests that high government debt or budget deficits could pose challenges for economic growth and public services in the future. Strengthening this category could involve targeted measures to reduce government deficits, improve tax collection efficiency, and pursue fiscally responsible spending initiatives that reduce long-term debt while supporting essential services.