Mongolia ranks 81st on the 2012 Index of Economic Freedom, receiving an economic freedom score of 61.5. Its overall score is 2.0 points higher than last year mainly due to increased scores in fiscal freedom and government spending.

The Mongolian economy registered one of the 10 largest core improvements in the 2012 Index, regaining the status of a “moderately free” economy. Renewed progress in advancing economic freedom has restored momentum for institutional reforms that are critical to ensuring long-term economic vitality. Mongolian entrepreneurs have benefited from better access to financing following banking reforms. Competitive tax rates and open trade regime are also promoting a vibrant private sector.

Although Mongolia experienced no decline in any area covered by the index, corruption and weak rule of law drags on economic development. Accelerating judicial reforms, along with the continued efforts to streamline public administration, will help sustain economic growth and improve living standards.

For over a decade, the Wall Street Journal and The Heritage Foundation, a Washington D.C. think tank, have tracked the march of economic freedom around the world with the Index of Economic Freedom. It claims to have brought the theories of Adam Smith to life by creating 10 benchmarks that gauge the economic success of 184 nations.