Balancing high economic freedom, lean public spending, strong growth, and low safety risk
| # | Country | Economic Freedom (EFI) |
Gov't Spending % of GDP |
Avg. Annual Growth (20 yr) |
Safety & Stability | Mechanisms Keeping Government Small |
|---|---|---|---|---|---|---|
| 1 | 🇸🇬Singapore | 89.4 | ~19% | ~4.5% | Very Low | Constitutional balanced-budget requirement; no capital gains or inheritance tax; sovereign wealth funds (Temasek, GIC) generate revenue without taxation; Central Provident Fund (CPF) replaces state pensions/welfare; state-linked enterprises are profitable rather than subsidised; political culture rooted in Lee Kuan Yew's lean-government ideology. |
| 2 | 🇹🇼Taiwan | 80.0 | ~19% | ~3.8% | Low *see note |
Historically limited welfare state; high household savings replace government safety nets; export-oriented SME model minimises state-directed subsidies; strong fiscal conservatism across party lines; defence spending kept moderate through ambiguity strategy rather than massive build-up. |
| 3 | 🇨🇱Chile | 75.2 | ~26% | ~3.2% | Low | Privatised pension system (AFP) since 1981 greatly reduces social-security outlays; constitutional fiscal responsibility rules and structural-balance target; Copper Stabilisation Fund smooths commodity windfalls; independent central bank; Chicago-School–influenced constitution (1980) embedded small-government norms. |
| 4 | 🇬🇪Georgia | 73.7 | ~29% | ~4.3% | Low–Moderate *see note |
Post-2003 Rose Revolution radical deregulation cut ministries from 18 to 13 and fired ~80 % of traffic police; flat 20 % income tax and low corporate tax; streamlined licensing (from 909 to ~100 permits); anti-corruption purge drastically shrank rent-seeking; small-state philosophy explicitly championed by reformers. |
| 5 | 🇰🇷South Korea | 73.1 | ~23% | ~3.3% | Low *see note |
Chaebol-driven growth model places industrial investment in private hands; welfare state remained minimal until 2000s and is still modest; cultural emphasis on self-reliance (Confucian work ethic); mandatory military service substitutes for large standing professional army costs; export competitiveness discipline keeps subsidies in check. |
| 6 | 🇦🇪United Arab Emirates | 71.8 | ~24% | ~3.5% | Low | Hydrocarbon revenues fund government without broad taxation; zero personal income tax and minimal corporate tax (9 % since 2023); free-trade zones with separate regulatory regimes attract FDI; emirate-level fiscal competition (Dubai vs Abu Dhabi) drives efficiency; monarchic governance enables rapid cost-benefit decisions without legislative bloat. |
| 7 | 🇲🇺Mauritius | 71.5 | ~24% | ~4.0% | Very Low | Island-state scale limits bureaucratic ambitions; export-processing zones since 1970s drove private-sector-led growth; consensual multi-party democracy with broadly pro-market consensus; negligible defence spending (no military threat); diversification from sugar → textiles → financial services done mostly via private initiative. |
| 8 | 🇵🇦Panama | 66.6 | ~24% | ~5.2% | Low | Panama Canal revenues (~$2–4 B/yr) reduce reliance on taxation; dollarised economy eliminates a central bank that could monetise deficits; no standing army (abolished 1990), drastically lowering defence costs; special economic zones (Colón Free Zone, Panama Pacifico) operate with minimal regulation; constitutional spending caps with limited amendment. |
| 9 | 🇧🇼Botswana | 68.5 | ~28% | ~3.8% | Very Low | Diamond revenues managed through Pula Fund (sovereign wealth), reducing tax burden; constitutional fiscal prudence — budget surpluses were the norm for decades; lean civil service relative to peers; no history of coups or civil war; tradition of kgotla (community consultation) builds legitimacy without expanding bureaucracy. |
| 10 | 🇨🇭Switzerland | 83.0 | ~33% | ~1.8% | Very Low | Direct democracy gives voters veto power over spending increases and tax hikes; 26 cantons in fiscal competition with one another, keeping rates low; constitutional debt brake (Schuldenbremse) since 2001; militia-based military avoids standing-army bloat; decentralisation pushes most services to cantonal/communal level, enforcing accountability. |
Sources & notes: