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El Salvador Is #117
El Salvador is #117 in Economic Freedom out of 176 Countries.
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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 54.4, El Salvador is classified as "Mostly Unfree":
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Evidence clearly shows that greater economic freedom leads to higher standards of living, increased job creation, improved education and healthcare, greater prosperity, and enhanced environmental stewardship.
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What Does Being “MoSTly UNfree” Mean for El Salvador?
El Salvador’s classification as "Mostly Unfree" on the Index of Economic Freedom points to significant government restrictions and institutional challenges that impede economic growth and individual prosperity. For the average Salvadoran, this classification often translates to limited access to economic opportunities, a lack of transparency in government processes, and weakened protections for personal and business assets, all of which impact financial security and social stability.
What categories doES El Salvador 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): ​
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Tax Burden 76.6
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Trade Freedom 70.0
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Government Spending 71.7
Solutions
El Salvador's worst 3 categories:
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Judicial Effectiveness 14.4
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Government Integrity 33.6
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Property Rights 41.6
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Judicial Effectiveness in El Salvador scores a low 14.4 out of 100, indicating severe issues with legal system functionality and the enforcement of laws. This weak judicial framework affects citizens by reducing access to fair and timely legal recourse, which can make property and business ownership risky. To improve judicial effectiveness, El Salvador could focus on strengthening the judiciary, increasing legal training, and ensuring that the courts operate independently and impartially to build public trust.
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Government Integrity scores 33.6 out of 100, highlighting issues with corruption and a lack of transparency in government operations. For Salvadorans, this low score means reduced trust in government institutions, inefficient public services, and the potential mismanagement of public resources. Enhancing government integrity could involve stricter anti-corruption measures, promoting transparency in government spending, and increasing accountability to restore public confidence in governmental processes.
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Property Rights in El Salvador score 41.6 out of 100, showing limited protections for property ownership and the enforcement of property laws. This score impacts citizens by making it challenging to invest in or securely own property, limiting opportunities for wealth-building and economic development. Strengthening property rights would require legal reforms to secure ownership protections, streamlining property registration processes, and improving judicial support for property-related disputes to create a more stable investment environment.
El Salvador's Economic Freedom over time:
