Estonia has risen two places in the Index of Economic Freedom compiled each year by the Heritage Foundation think tank and the Wall Street Journal.
In rising from 13th to 11th, Estonia nipped the US, which meanwhile fell from 10th to 12th. It was the first time in 20 years the US was not in the top 10, and Estonia's gains came partly in the same areas in which the US declined.
"[Estonia's] overall score is 0.6 point higher than last year, with improvements in property rights and trade freedom offsetting a small combined decline in business freedom and the management of public spending. Estonia is ranked 4th out of 43 countries in the Europe region and its overall score is well above the regional and world averages," said the report.
In Europe, only Switzerland, Ireland and Denmark received a higher score than did Estonia.
The US dropped due to "deteriorations in property rights, fiscal freedom and business freedom," the authors said.
Estonia's all-time high was 8th, and one of the authors of the report, Bryan Riley, told ERR Radio that Estonia is "certainly knocking on the door" of the top 10 once again. Riley said: "Hopefully the US can also look to Estonia and see what policies have worked and learn from them - such as regulation of private property, where we in the US have been moving in the opposite direction."
In the 2014 Index of Economic Freedom, only the top six - Hong Kong, Singapore, Australia, Switzerland, New Zealand and Canada - classified as "free."
Starting with 7th place Chile, the next 28 countries occupied the "Mostly Free" bracket.