Costa Rica Is #37

Costa Rica is #37 in Economic Freedom out of 176 Countries.

Every year the Heritage Foundation, a leading U.S. nonprofit, produces the Index of Economic Freedom Report and ranks how free and open each country’s economy is.

With a score of 67.7, Costa Rica is classified as "Moderately Free":

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What Does Being “Moderately free” Mean for Costa Rica

Costa Rica’s "Moderately Free" classification on the Index of Economic Freedom reflects a generally open economy with strong trade, business, and judicial systems but also reveals areas where fiscal and financial limitations constrain full economic freedom. For the average Costa Rican, this means accessible economic opportunities but also enduring challenges related to government spending, fiscal stability, and transparency that can limit financial security and growth.

What categories doES Costa rica DO well in?

To do well ("mostly free") a country must score 70 - 79.9. To classify as excellent ("free") a country must score 80 or higher. Costa Rica scores relatively well in these areas (scores out of 100):

Government Spending 86.9
Business Freedom 79.5
Tax Burden 78.9
Judicial Effectiveness 76.9
Trade Freedom 75.0
Monetary Freedom 74.5

Solutions

Costa Rica's worst 3 categories:

Fiscal Health 44.4
Financial Freedom 50.0
Government Integrity 58.7

Costa Rica’s Fiscal Health score stands at 44.4 out of 100, indicating high public debt and budget deficits that strain the national economy. This score impacts citizens by potentially increasing the tax burden and limiting funds for essential public services, which can affect overall economic stability. Improving fiscal health would require Costa Rica to focus on reducing budget deficits, managing government debt more effectively, and implementing tax reforms to strengthen public finances without overburdening citizens.

Financial Freedom in Costa Rica scores 50.0 out of 100, reflecting regulatory constraints and limited access to credit in the banking sector. For Costa Ricans, this score means that access to financial services and loans may be restricted, which can stifle entrepreneurship and limit personal and business growth. To improve financial freedom, Costa Rica could consider easing financial regulations, encouraging competition in the banking sector, and promoting access to credit for small businesses and individuals.

Government Integrity, with a score of 58.7 out of 100, points to moderate issues with corruption and transparency in public administration. This score affects Costa Ricans by diminishing trust in government institutions and potentially misallocating resources, which can impact public services and reduce investment. Improving government integrity would involve implementing stronger anti-corruption policies, enhancing transparency, and increasing accountability for public officials to ensure resources are used efficiently and equitably.

Costa Rica's Economic Freedom over time:

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