UK slips from seventh to 12th as Nordic rivals pull ahead according to new global capitalism index

Researchers at the University of Virginia spent three years developing the first Global Capitalism Index (GCI), which ranks 161 countries across eight measures of capitalism, including business formation, market competition and the flow of goods and capital.

Switzerland topped the 2025 rankings, followed by the US, Hong Kong, Canada and Singapore. Luxembourg, Denmark, Australia, Sweden and Norway completed the top ten, while New Zealand ranked 11th ahead of the UK.

The researchers said the UK had experienced a slight decline in its ranking in recent years, driven by modest regressions across three of the index’s subindices: the free flow of goods and capital, labour market openness and market competition.

The UK has also been overtaken by several Nordic countries, particularly Sweden and Norway, which improved their performance over the past decade.
Despite the relative decline, the researchers described the UK as remaining “relatively stable”. However, they warned that its ranking could fall further if these trends continued.

The index draws on more than 200 datasets covering eight pillars of capitalism. It aims to provide a framework for examining how different economic conditions relate to outcomes including democracy, corruption, human wellbeing and inequality.

The researchers found that capitalist conditions had declined incrementally worldwide over the 2009–2025 period, alongside widening regional differences. Central Asia recorded improvements, while Latin America and Western Europe experienced declines.

Capital markets and banking were the weakest pillars across countries overall, while property rights were the most significant factor in differentiating national performance.

The index also highlights differences in the forms capitalism takes around the world. Switzerland, Hong Kong and the US ranked highly for entrepreneurial conditions, reflecting their performance in areas such as new business formation and market policies.

Japan and South Korea performed strongly in the corporate category, supported by their capital markets and banking systems. Western European countries and Norway performed well on institutional measures, including market competition, labour markets and business formation, although the researchers identified weaknesses in financial-sector measures.

Zimbabwe and Algeria were among the countries showing the greatest improvements in capitalist conditions, while Sierra Leone and Venezuela recorded some of the sharpest declines since 2009, with their scores falling by 23.9 and 23.2 points respectively.

Scott Miller, assistant professor of business administration at the University of Virginia’s Darden School of Business and director of the Democracy and Capitalism Lab at the Karsh Institute of Democracy, said the index sought to establish a clearer definition of capitalism and measure how it operated across countries.

“If you ask anyone what capitalism is, the answers are all different, and that makes it hard to argue about the validity or value of it. We concluded that this word, capitalism, matters to everyone, so it matters to define it and measure how it really works across the globe.

“The United Kingdom performs well across a series of metrics, coming in number 12 in 2025. The UK has seen slight declines in its ranking in recent years, due largely to improvements in performance from close rivals and moderate declines in 3 predominant subindices.

“The UK has been passed by several Nordic countries, particularly Sweden and Norway,  both of whom improved slightly over the past decade. The UK declines are mostly based on slight regressions in Free Flow of Goods and Capital, Labor Market Openness, and Market Competition. 

Overall, the UK remains relatively stable. That said, it is becoming increasingly obvious that many of its northern European neighbors are making significant improvements, meaning that the UK could see significant declines in future years if these trends are not reversed.”

Miller explained the index could have practical implications for policymakers and business leaders seeking to understand the effects of economic decisions.

“For individual countries, the index makes it much easier to identify what conditions are conducive to capitalism and which are not.” Using China as an example, Miller said the index highlighted unexpectedly strong business conditions alongside increasingly restricted flows of goods and capital.

The researchers intend to update the index annually, providing a continuing assessment of how capitalist conditions evolve across countries and regions.