The study shows that 74 of the 156 countries graded became more economically free, while 49 became less free. Economic freedom has increased every year since the index was first published in 1995.

The editors stress the relationship between economic freedom and per capita income. World Bank data show that per capita income for "mostly unfree" or "repressed" economies averaged only about $3,400 in 2000. That figure more than triples - to $12,569 - for "mostly free" economies, and more than doubles again - to $26,855 - for "free" economies.

Of all the factors graded in the index, the "fiscal burden of government" score (which essentially measures how much a government taxes and spends) showed the most improvement worldwide. The cost of government fell in 37 nations, and rose in only 22.

The index also indicates that more governments are refraining from intervening in their economies, and a higher number are easing restrictions on their banking industries.

Copies of the 2003 Index of Economic Freedom (428 pp., $24.95) can be ordered by calling (800) 975-8625.