One of the Smart Conservative lines on the Nordic countries is that they have less regulation than the US has. The upshot of this is that they succeed because of their conservative attributes (low regulation and free markets) and not because of their left-wing attributes (strong unions, big public sectors, and substantial state ownership). This specific understanding informs a lot of the work of the Niskanen Center, including an April paper from Samuel Hammond.

The basic problem with these arguments is that efforts to measure regulatory differences between the US and Nordic countries don’t really pass the laugh test. Hammond relies upon the Heritage Foundation’s Index of Economic Freedom, which itself relies upon the World Bank’s Doing Business report. After applying some modest transformations to the World Bank data, Heritage reports that “Business Freedom” is higher in all Nordic countries than it is in the US.

But how does Heritage measure Business Freedom? The short of it is that they look at (1) how many steps it takes, (2) how much time it takes, and (3) how much it costs to (a) open a business, (b) obtain a construction permit, (c) close a business, and (d) get electricity. That’s it. The kind of regulations companies actually complain about — safety, environment, consumer protection, product liability, and so on — are left out entirely.