Sunday, December 15, 2013

Some Economically Free States Remain - The Question is Which Ones?

Townhall publishes a Fraser Institute report (92 page pdf) on the most economically free places in North America.  The institute is labeled as conservative/libertarian on Wiki, for what that's worth.  Take a look at the results (click to embiggen, as always)
Note that they show Colorado as one of the most free, California as in the second quartile and a lot of other honestly puzzling results.  Illinois is more free than Florida and Tennessee?  Both Florida and Tennessee don't have state income taxes while Illinois does.  That surely can't be the only justification for being more free; but how much does it take to outweigh it? And California better than Arizona? I personally know some Arizonans who would love to send some of the California refugees back. 

According to the report:
And here’s the ranking for economic freedom in states and provinces. As you can see, Alberta and Saskatchewan are in the top two spots, followed by the American states of Delaware, Texas, and Nevada.
If you look at the policies that sub-national governments actually control, the rankings change a bit. Alberta still comes in first place, but Saskatchewan plummets.

Meanwhile, the best American state is South Dakota, followed by Tennessee, Delaware, and Texas.
That sounds a bit more like my perceptions. North Dakota, home of the lowest unemployment rate in the nation, is just below them in 8th place. 

My impression is that they developed an algorithm - a way to calculate an answer, these ratings - and they now believe it to be true.  In my business, we then spend a bit of time and money to see if the algorithm gives answers that agree with reality.  I think they need to do that.  


  1. They are pretty clearly blindly following their model. California outranking half the country is proof of that. Delaware ranking so highly implies to me that they are weighing freedom for corporations more than freedom for people - Delaware is known for easy corporate regulations, which is why it's home on paper to so many corporations. A lot of my credit card junk mail comes from Wilmington.

  2. I suspect that their model delivers scores that reflect what their paying clients care about. I would guess that includes things like regulatory certainty (as opposed to absence of regs), taxes that can be gamed by a big corp rather than low taxes, and so on.

    Alaska scores poorly, but not near the bottom ... probably a fair rating.

    I can tell you that bureaucrats and legislators read those Frazier rankings.

  3. I did note that all of the states with bad ratings had the least gun control laws.---Ray

  4. Depends on your meaning of 'free'...


  5. Vermont rated "less free" than New York? Massachusetts "more free" than both of them?
    Nice try, now pull the other one.