Hong Kong and Singapore are ranked the world's freest economies - but they face a growing challenge from Ireland and the UK, according to a survey by the Heritage Foundation and Wall Street Journaltoday.
The two Asian port cities have taken the first and second spots for 12 straight years in the Index of Economic Freedom.
Both were rated as having improved further last year, thanks to reduced government spending in Hong Kong and a cut in tax rates in Singapore, the survey said.
Edwin J Feulner, president of Heritage Foundation, a conservative think tank based in Washington, said: "Hong Kong has the best score it's ever had, and the gap between Hong Kong and Singapore remains fairly substantial."
The index's rankings for the 157 nations in the survey are based on factors including openness to trade and foreign investment, the size of government and its involvement in the economy, regulation of wages and prices, and protection of property rights.
Mr Feulner said the gap between No 2 Singapore and No 3 Ireland was quite narrow, and Luxembourg, Iceland, the United Kingdom, Estonia and Denmark are close behind in the top 10.
He said: "The governments in Ireland and Luxembourg are doing some very sensible things."
He pointed out that the two countries are generally seeking to replicate Hong Kong and Singapore's success in using low taxes, light regulation and strong legal systems to attract corporate investment.
But while one of them may be able to dethrone Singapore, Hong Kong's grip on the top spot looks secure unless it makes major policy shifts, he said.
"For Luxembourg, Ireland, or Estonia to really break through and become No 1 is going to be difficult because they're working within these constraints coming out of Brussels," he said, pointing to EU restrictions on agricultural trade.
Myanmar (Burma), Iran and North Korea were ranked the least-free economies. Overall, the survey found that 99 countries improved from last year, while 51 declined and five were unchanged.
The only region to see a net decline in the freedom rankings was North Africa and the Middle East.
AP