| Country | Economic Freedom Rank1 (2024) | Total Government Spending (% of GDP, 2023)2 |
Avg. Real GDP Growth (2004–2023) |
Crime / War / Terrorism Risk3 | Mechanisms Keeping Government Size Small |
|---|---|---|---|---|---|
| Singapore | 1st | 13.6% | 4.7% | Very low crime & war risk (GPI rank 6) | Constitutional balanced‑budget rule; mandatory Central Provident Fund (savings/lifetime accounts) reduces need for public welfare; very low income‑tax rates; targeted, means‑tested social transfers; high public‑sector efficiency. |
| Hong Kong SAR | 2nd | 17.5% | 2.9% | Very low violent crime; no war; politically stable (autonomous region) | Basic Law obligations to keep taxes low and budgets balanced; no VAT/sales tax; simple low‑rate tax system (profits tax 16.5%, salaries tax max 15%); large fiscal reserves allow counter‑cyclical spending without expanding permanent state size; entrenched laissez‑faire culture. |
| Ireland | 3rd | 22.9% | 5.3% | Very low terrorism/war risk; low crime (GPI rank 3) | Highly competitive corporate tax regime (12.5%, now 15% for large MNEs) attracts multinational profits, boosting tax revenue without high rates; EU‑fiscal‑rule framework; post‑2010 structural reforms restrained public spending; growth dividends and foreign‑investment inflows keep welfare spending moderate. |
| Taiwan | 8th | 16.7% | 3.7% | Very low crime; no recent war; strong rule of law | Conservative fiscal tradition with low tax‑to‑GDP ratio; welfare provision decentralised to families and firms; National Health Insurance funded mainly by premiums, not general taxes; full‑employment growth reduces demand for large‑scale income support. |
| United Arab Emirates | 22nd | 29.9% | 3.6% | Very low crime & war risk; minimal terrorism (GPI rank 26) | No personal income tax; corporate tax only recently introduced (9%) for most businesses; hydrocarbon revenue finances a large part of spending without a heavy tax burden; sovereign wealth funds absorb surpluses and limit pressures to expand government; strong pro‑business regulatory environment. |
| Mauritius | 26th | 26.8% | 3.3% | Low crime; no war/terrorism (GPI rank 23) | Simple, low‑rate tax system (flat 15% personal/corporate tax); strong fiscal rules and independent institutions; heavy reliance on private‑sector‑driven tourism and financial services; targeted social assistance rather than universal entitlements; efficient public‑private partnerships in utilities. |
| Costa Rica | 46th | 18.8% | 3.8% | Low war/terrorism risk; peaceful society (GPI rank 39) | Constitutional abolition of a standing army eliminates military expenditure; social security (including healthcare/pensions) is managed by autonomous institutions (e.g. CCSS) and financed by mandatory contributions, keeping its budget outside the central government; export‑led growth and tourism generate revenue with limited state intervention; fiscal responsibility law caps deficits. |
| Chile | 18th | 23.6% | 3.3% | Low terrorism/war risk; moderate urban crime (GPI rank 58) | Structural balance fiscal rule (since 2001) forces saving during copper booms; pension system based on privately managed individual accounts (AFPs) sharply reduces long‑term public pension liabilities; legacy of market‑oriented reforms embedded a pro‑competition, limited‑state framework; strong independent central bank. |
| Liechtenstein | Very high (est. top 5)4 | ~23.0% (2022 est.) | ~2.5% | Negligible crime; no army; exceptionally stable | Ultra‑small, affluent population; extremely low tax rates (max personal income tax 24%, corporate 12.5%); minimal welfare state – private insurance and family provisions substitute for public programmes; deep economic integration with Switzerland reinforces fiscal conservatism; government focuses on framework conditions rather than direct intervention. |
| Panama | 48th | 20.1% | 6.2% | Low war/terrorism risk; moderate crime (GPI rank 68) | Dollarised economy with no central bank monetary financing; territorial tax system (no tax on foreign‑source income) keeps rates low; Panama Canal and international banking centre provide high revenues without large state structures; constitutional debt limits and fiscal discipline stabilise spending; large service‑based economy thrives with light‑touch regulation. |
Notes:
1 Index of Economic Freedom 2024 (Heritage Foundation).
2 General government total expenditure (all levels) as % of GDP, IMF World Economic Outlook (April 2024), except Liechtenstein (CIA World Factbook 2022 est.).
3 Global Peace Index 2023 (Institute for Economics & Peace); non‑ranked jurisdictions assessed qualitatively.
4 Liechtenstein is not formally ranked by the Heritage Foundation, but its policies and institutional framework would place it among the very top economic freedom countries.