Global capitalist conditions have weakened since 2009, UVA index shows

Although the index does not directly move markets, it bolsters the argument that capital gravitates toward jurisdictions with strong property rights and open capital markets, benefiting established hubs such as Switzerland, Singapore and Hong Kong. Globally, capital markets and banking emerge as the weakest pillars, indicating that underdeveloped financial systems continue to limit investment in many economies. Western Europe has declined, and the UK, Ireland, Finland, and the Netherlands have dropped out of the top ten, reinforcing the story of a region losing competitiveness for mobile capital. The growing regional divergence could lead investors to favor Central Asia and certain emerging markets over parts of Latin America.

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The world's most capitalist economies closely resemble the top destinations for private wealth, even as the overall system has been gradually weakening for 16 years.

Summary:

• Switzerland tops the University of Virginia's Global Capitalism Index, with the United States, Hong Kong, Canada, and Singapore following; Angola is at the bottom among 161 countries.
• Rounding out the top ten for 2025 are Luxembourg, Denmark, Australia, Sweden, and Norway.
• Among the top six, four are key international wealth management hubs.
• Singapore was the leader when the index started in 2009, but the UK, Ireland, Finland, and the Netherlands have since fallen out of the top ten.
• The index reveals a slow worldwide decline in capitalist conditions, with Central Asia improving while Latin America and Western Europe deteriorate.
• Property rights are the biggest differentiator between high and low scorers, whereas capital markets and banking are the weakest components globally.

According to a new Global Capitalism Index from the University of Virginia, Switzerland is the world's most capitalist economy, followed by the US, Hong Kong, Canada, and Singapore. The index rates 161 countries from 1 to 100, with Angola at the lowest. The 2025 top ten is completed by Luxembourg, Denmark, Australia, Sweden, and Norway.

A notable characteristic of the top group is its cluster of financial centers. Four of the top six—Switzerland, Hong Kong, Singapore, and Luxembourg—are major global hubs for cross-border wealth management, indicating that the factors the index values align closely with those that draw private capital.

Since the index began in 2009, the rankings have changed considerably. Singapore was first and Hong Kong second at the start, but the UK, Ireland, Finland, and the Netherlands, all in the top ten then, have since left. Over the entire data set, researchers observed a slow decline in capitalist conditions globally over 16 years, along with growing regional disparities. Central Asia has seen improvement, whereas Latin America and Western Europe have worsened. Sierra Leone and Venezuela experienced the largest drops, falling by about 24 and 23 points respectively, while Zimbabwe and Algeria were among those that improved the most.

Across all nations, capital markets and banking were the weakest areas, while property rights turned out to be the factor that most distinguishes high from low scorers.

The researchers also classify countries into four archetypes. Entrepreneurial economies—led by Switzerland, Hong Kong, and the US—excel in new business formation and market policy but lag in property rights and capital flows. Corporate economies like Japan and South Korea do well in capital markets and banking but score low on competition, labor market freedom, and business creation. Institutional economies, with Norway and Western Europe at the forefront, are strong in the real economy but weak in banking and capital markets. Commercial economies, including Singapore and France, are characterized by free capital flows and property rights.

The index is set to be updated each year, enabling tracking of changes across regions and archetypes over time.

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Side note: details on the index and its authors

The Global Capitalism Index was created by the University of Virginia, a public research university in Charlottesville that was founded by Thomas Jefferson in 1819. The project was jointly led by the Democracy and Capitalism Lab at the university's Karsh Institute of Democracy and the Institute for Business in Society at the Darden School of Business. The index uses 242 data sets from 33 domains, organized into eight subindices that cover property rights, market competition, labor market openness, banking system strength, and the free movement of goods and capital, among others. Instead of using subjective weights, the researchers applied principal components analysis to statistically weight the data, allowing the data itself to determine each factor's importance. The data series starts in 2009, and the researchers intend to update the index annually.

China's omission might suggest a shortcoming in the evaluation,