A ranking of the world's freest countries in economic, social, and other terms puts Hong Kong, perhaps controversially, as top of the scale, while the US doesn't even make it into the top 10.

In a ranking that is likely to be seized upon by politicians and pundits, an annual barometer of how well, or badly, individual freedoms are respected finds that Hong Kong is the freest place on Earth in which to live, with Switzerland in second place, while neither the US nor Singapore make it into the top ten.

The Human Freedom Index, produced by the Washington, DC-headquartered CATO Institute think tank, and in association with a number of other institutes, examines personal, civil and economic liberty to arrive at a composite score for hundreds of jurisdictions. The data is based on figures and survey work for 2012.

The tone of the report is far from confident, warning that some of the progress towards free markets and liberal democracy globally has stalled or, in some cases, reversed; rising regulation and government intervention since the 2008 financial crisis has played a part in the trend.

On a scale of zero to 10, where 10 represents more freedom, the non-weighted average rating for 152 countries in 2012 was 6.96. The level of global freedom stayed about the same compared to 2008, but almost all countries experienced changes in their ratings, with about half of those increasing their ratings and half decreasing.

The report may offer some comfort to Switzerland at a time when its future as a major financial centre is being questioned. There may be some criticism of the report’s methodology – Hong Kong, for example, while in some ways separate from Communist-run mainland China, has felt pressure from its large neighbour, leading to pro-democracy protests in the Asian city earlier in the year. Switzerland last year voted in favour of curbs on immigration from the European Union. And Singapore’s lowly ranking (43) may strike some observers as overdone, given its still low tax rates and stable property rights.

“The institutional preconditions of personal freedoms are gradually eroding. Freedom flourishes best under a liberal democracy, ie, under a political order that combines the rule of the people with constitutionally guaranteed individual freedoms. This form of government, which had gained ground globally in the 1990s, is now on the retreat in some parts of the world,” the report’s authors said.

The top 10 jurisdictions in order were: Hong Kong, Switzerland, Finland, Denmark, New Zealand, Canada, Australia, Ireland, the UK, and Sweden. Next are Norway, Austria, Germany, Iceland, Netherlands, Malta, Luxembourg, Chile, Mauritius, the US, Czech Republic, Estonia, Belgium, Taiwan, Portugal, Lithuania, Poland, Japan, Latvia, Slovakia, South Korea, Romania, France, Uruguay, Italy, Cyprus, Spain, Hungary, Costa Rica, Montenegro, Slovenia.

Other countries of note with rankings in brackets are: South Africa (70), India (75), Brazil (82), Russia (111), China (132), Nigeria (139), Saudi Arabia (141), Venezuela (144), Zimbabwe (149), and Iran (152).

Out of 17 regions, the highest levels of freedom are in Northern Europe, North America (Canada and the US), and Western Europe. The lowest levels are in the Middle East and North Africa, Sub-Saharan Africa, and South Asia. Women’s freedoms, as measured by five relevant indicators in the index, are most protected in Europe and North America and least protected in South Asia, Sub-Saharan Africa, and the Middle East and North Africa.