BEIRUT: Lebanon's economy ranked as the 10th most liberal in the Middle East and North Africa region (MENA) and 90th in the world, according to the 2012 Heritage Foundation Index of Economic Freedom.

The report, published Sunday, said Lebanon's score remained unchanged from 2011, witnessing small gains in labor freedom and that control of government spending had offset by small declines in business and monetary freedom.

The study looks at the level of freedom in four main sectors: rule of law, limited government, regulatory efficiency and open markets.

Lebanon's overall score is 60.1, which is just above the world average.

The Washington-based think tank attributed Lebanon’s score primarily to political instability, corruption and a weak judiciary system.

The group said the tense political environment and inefficient regulations, particularly commercial regulations, have in the long run hampered the country's overall entrepreneurial environment and private investment.

"In the absence of a well-functioning legal framework, protection of property rights remains weak, and corruption is widespread," added the report, which was published in partnership with the Wall Street Journal.

It also said Lebanon's judiciary was "weak and vulnerable to political interference," which, coupled with rampant corruption, undermines the already fragile rule of law.

As for regulatory efficiency, the report said business remains limited due to various factors, including the high cost of licensing, the lengthy and costly process for closing a business and the relatively rigid labor regulations.

Based on the report, Lebanon's deficit equals 7.3 percent of its GDP, while public debt continued to be larger than the size of the economy.

The study briefly touched on Lebanon's banking sector, which is estimated to be three times bigger than the economy, saying that the highly competitive atmosphere has contributed to improved efficiency but that political instability and non-transparent interpretation of laws still impede foreign investment.

Bahrain ranked first in the region, followed by Qatar, Jordan, UAE and Oman. The countries classified as most un-free were, in declining order of freedom, Tunisia, Egypt, Yemen, and Syria. Iran and Libya were classified as completely repressed, while Iraq and Sudan were left out of the ranking due to the lack of sufficiently reliable data on economic freedom within the country.

Globally, Hong Kong was ranked 1st, followed by Singapore, Australia, New Zealand and Switzerland. The U.S. ranked 10th, Japan 22nd and Germany 26th. According to the report, Greece’s score declined the most, plunging nearly five points to 55.4. Zimbabwe finished next to last among the 179 countries rated but showed the biggest gains in economic freedom.