Can economic freedom really be quantified? Are heritage foundation estimates accurate? How do you explain the incredible growth in living standards in Hong Kong during the latter half of the 20th century, but for their economic freedom? Also the economic freedom present immediately right now does not translate into the economic status of a nation right now, but rather the prevelance of economic freedom in the past translates into the wealth of a nation presently. These things take time.
Prosperity is something that is achieved in the very long term, after a lot of capital has been accumulated.
Economic freedom can be achieved faster, before prosperity.
Generally speaking, when a poor country moves towards more economic freedom, it is expected to be more prosperous in the long run than it would otherwise be had it remained economically unfree.
Such a statement can be observed by the striking contrast in the development of regions like North and South Korea, East and West Germany, Zimbabwe and Botswana, Argentina and Chile, Cuba and Puerto Rico, Taiwan and Mainland China.
At the onset these paired regions had similar level of prosperity, and similar geographical, ethnical and demographical compositions. Often times the unfree states starting at a higher position and being eventually (and invariably) overtaken by their freer counterparts.
Those are the significant comparisons. A comparison between Norway and Hong Kong is a comparison between an apple and an orange.
And if you think the measurement of economic freedom is bad, the measurements for wealth are even worse. And these prosperity indexes tend to overweight “government provided” services. If you look at the prosperity survey only two of the categories relate to economics?
That being said, Norway has huge oil reservers and a lot of mineral extraction for a country with a very small population. Denmark is significantly freer in the respect for private property and contract than say the USA or the UK. As bad as the wealth survey is, it rated Denmark number 1 for entrepreneurship which is directly related to private property.
Considering Hong Kong, the place unlike Norway is full of millions and has very little in the way of natural resources. Add into the equation that it is literally attached to a Communist Country so its ability to interact with its neighbor China until the death of Mao has been limited. And look at number two: Singapore where growth has been much faster and you find that there is an increasing amount of cross border trade.