The Netherlands

Abbie Swidorski

Overall Score: 73.7 World Ranking: 17

The Netherlands Quick Facts vs The United States


  • Population: 16.8 million/ 316.4 million
  • GDP: $700.5 billion/ $16.8 trillion
  • GDP Growth: 0.8%/ 1.9%
  • GDP Per Capita: $41,711/ $53,101
  • Unemployment: 6.7%/ 7.5%
  • Inflation: 2.6%/ 1.5%
  • Foreign Direct Investment: $24.4 billion/ $187.5 billion

Legal System

The property rights index measures both the degree to which a country's laws protect private property rights and the degree to which its government enforces those laws. A higher score (on a scale of 0-100) is better. The Netherlands have a score of 90. Also, the property rights and investment regimes are the second freest in the world.

Competitive Markets

The Netherlands participates in the market globally and domestically. While domestically, a few issues may arise, the foreign trade opens up a whole world of global commerce. The Netherlands is the second largest country in exporting almost 90% of their GDP for agricultural commerce. They are generally more efficient in their business which gives them a comparative advantage over neighboring countries.

Limits on Government Regulation

In the Netherlands, there has been an increase in government spending and perceived government corruption. With these two factors, domestic trade has become more difficult. Also, the taxes are generally high, which pushes up public debt along with the excessive government spending. Over a year's time, economic freedom has decreased one percent due to the regulation of the government. However, generally government corruption isn't a large problem. Effective anti-corruption measures ensure government integrity.

An Efficient Capital Market

The Netherlands has a history of openness to global commerce and economic freedom. They generally treat domestic and international affairs equally. Because both sides are equal, trade and business has been successful. With this success, more wealth is able to come to the country. Internally, the invisible hand regulates the market and creates a stable economy. Exporting is a huge investment for the Netherlands and with it, more productive regulations have been implemented. Overall, because the markets are doing very well, more economically successful plans are made and the economy continues to prosper.

Monetary Stability

The Netherlands has an overall monetary freedom score of 79.8, which is a decrease from the previous year. However, this score is still high to the point where they are economically free or almost completely free. The money is well regulated and taken care of. A part of this is due to the government regulations and subsidy cuts for that sole reason. Another aspect to look at would be creating business. In the Netherlands, no minimum capital is needed to start your own business. Instead, time is valued. Overall, the Netherlands has good monetary stability.

Low Tax Rates

The Netherlands is a founding member of the European Union (EU). EU members have a 1% average tariff rate. While this may seem large, there are some non-tariff barriers that exist. The EU is relatively open to external trade, and actually excels in it. As previously stated, the Netherlands treats domestic and international affairs quite the same. Taxes in the Netherlands are generally high. That goes hand in hand with high government spending. Between these two factors, the public debt is increasing. While this seems negative, it does not seem to affect the success of the Netherlands economy because they still excel in foreign trade.

Free Trade

Overall, the Netherlands has a score of 88.0 in trade freedom. The Netherlands trades 90% of its GDP internationally. It is the second largest exporter of agricultural goods. It also holds the port of Rotterdam which is one of the busiest in the world and serves as a primary entry point for goods to Europe.
Netherlands is next Ireland - Schulz

Summary

In the video above, the economy of the Netherlands is discussed. In the recent years, the Netherlands has not been progressing at a good rate and is slowly falling behind in their economic success. However, the fix to this problem is quite simple due to the fact that they are the second largest exporter of agricultural goods. The problem is not mainly domestic, which means it is quite easy to fix. In the video, the Netherlands is paralleled to Ireland a few years ago when they were in a predicament as well. It is reasoned that if Ireland could increase economic productivity while exporting only 20 or 30% of their GDP, then the Netherlands should have an easier time getting back on track for economic success.