Ireland has been ranked seventh in the 2002 Economic Freedom of the World Report.
The report measures the level of economic freedom in 123 countries worldwide.
The ranking marks a drop of one place on last year's performance. Hong Kong and Singapore topped the poll with the high levels of freedom in their labour and productive markets, while the Democratic Republic of Congo was listed in last place.
The UK and the US were above Ireland but established powers such as Germany (15), France (38) and Italy (35) polled poorly. Africans and Asian countries were found to have very low levels of economic freedom - a reflection of inadequate legal systems.
This highlighted an important point that restrictive regulatory environments are stifling economic progress in Latin America.
The report, issued by the Canadian Fraser Institute and the Open Republic Institute of Ireland (ORI), measured economic freedom in a number of areas. Those areas included the size of government expenditure, legal structures, freedom of trade, and labour market regulations.
Ireland ranked third in its relationships with foreign markets, an indication of that the euro has promoted international companies to trade here. The report found Ireland to be strong in most areas except labour market relations. This may refer to the increase industrial disputes over the past few years that have affected employment relations.
An ORI spokesman said that modern economic growth in Ireland is about discovery, innovation and brain power. "Thus, the strong relationship between economic freedom and economic growth is not be surprising," the spokesman added.