Rising two places from last year, Finland is ranked ninth in the world and second in Europe in the 2012 Economic Freedom of the World report.
The report, which is jointly published by the Fraser Institute and the Libera Foundation, finds Finland has improved its performance in property rights, freedom to trade internationally, availability of sound money, and regulations concerning credit, labour and business.
The index measures the degree to which the policies and institutions of countries are supportive of economic freedom.
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