correlation between economic freedom and economic growth was much stronger than it is

Here is a list of countries ranked by economic freedom:

http://www.heritage.org/index/

The top 10 are all very prosperous countries. In particular, [...]

Princess_Stargirl is talking about the correlation with economic growth, which is not going to be the same as the correlation with economic prosperity. This looks like a confusion of a variable with its rate of change.

It is informative to see what happens if I (1) correct this by correlating the economic freedom index with GDP growth, and (2) use as big a sample as is available instead of focusing on particular cases. I copied the freedom ratings from that Heritage web page and real GDP growth rates ("estimates are for the year 2013 unless otherwise indicated") from Wikipedia. The correlation between the freedom index and real GDP growth turns out to be negative: the Pearson correlation coefficient is -0.19 and Spearman's rank correlation coefficient (which allows for nonlinearity) is -0.35. Plotting the data and a loess curve with R's default settings:

Some outliers are evident. Perhaps they're disproportionately skewing the freedom-growth correlation? I take out North Korea (the far left point) and the two lowest points, Cyprus and Central African Republic:

and in fact the freedom-growth correlation sinks further, to -0.38 (Spearman's rank) or -0.30 (Pearson). The main mass of nations hovers around the part of the loess curve which slopes downward.

At this point in time, the correlation between the Heritage Foundation's index of economic freedom and economic growth is unambiguously negative. I suspect this is because being a poor country is associated with low economic freedom but high catch-up growth. What happens if I correlate the freedom index with annualized GDP growth over a longer period, 1990-2007, for which catch-up growth is probably less important?

I now wind up with positive correlations (+0.25 for Spearman, +0.20 for Pearson). Now I throw out the outlying North Korea (the leftmost point), Zimbabwe (the bottommost), and Equatorial Guinea (the topmost).

This has no meaningful effect on the correlations, which become +0.24 (Spearman) and +0.21 (Pearson). Overall, by switching from a more up-to-date growth statistic to a more long-term (and pre-Great Recession and mostly post-Soviet) statistic, I change the sign of the correlation between growth and the Heritage Foundation's assessment of economic freedom.

It's not immediately obvious to me which GDP growth statistic is more appropriate. 2013 growth has the advantages of being more up-to-date and better matching when the Index of Economic Freedom was calculated, but is less representative of each country's long-term economic trajectory. 1990-2007 growth is more representative but also involves comparing 24-year-old data to a recent index; the proper thing to do here would be to use a similarly long-term average of the Index of Economic Freedom, but that's too much like real work.

There is also the question of how to operationalize "economic freedom", but this comment is long enough. I evade that problem here by simply taking the data tables suggested upthread as given, and after doing so the basic conclusion seems to be that the correlation between "economic freedom" and "economic growth" is modest, with its sign sensitive to how one operationalizes growth. (Check my work with my data file.)

[Edited 19/10 to change "Gunea" to "Guinea", and add "after doing so".]