The United States of Freedom
Freedom in the 50 States, published by the Cato Institute, finds New Hampshire is the freest state, while New York ranks by far the least free in the nation.
Which state is the freest? Which state is the least? Which one has the most lightly taxed and regulated economy? Which states protect personal freedoms the best? The worst? How free is your state?
The newly published 2016 edition of Freedom in the 50 States is one of the most comprehensive and definitive sources on how public polices in each American state impact an individual’s economic, social, and personal freedoms. Study authors William P. Ruger and Jason Sorens have gathered data on more than 230 variables to measure freedom now and in the past.
“While the federal government has become more intrusive and inefficient over the last two decades, individual states are providing Americans with a little-recognized renaissance of policy innovation,” argue Ruger and Sorens. “If we want to save our freedom and restore good government, it is to the states that we must look and not to the federal government.”
Freedom in the 50 States examines state and local government intervention across a wide range of policy categories—from taxation to debt, from eminent domain laws to occupational licensing, and from drug policy to educational choice.
Overall, New Hampshire, Alaska, Oklahoma, Indiana, and South Dakota make up a quintet at the top of the ranking. New York is by far the least free state, followed by California, Hawaii, New Jersey, and Maryland.
Between 2006 and year-end 2014, the latest available data, Ruger and Sorens find the average state has seen dramatic increases in economic freedom, after the effects of the federally mandated Patient Protection and Affordable Care Act are parsed out. This has largely been the result of states cutting spending during the financial crisis, with some states going even further and cutting taxes simultaneously.
Conservative states tend to do better on economic freedom overall, although not always by a huge margin. On personal freedom, the results are less clear cut. Progressive states have done better on marriage freedom, cannabis laws, and incarceration. But conservative states gain points on personal freedom too when it comes to gun rights, educational freedom, and smoking on private property.
States that have lower freedom rankings tend to be less economically prosperous. They tend to have higher rates of corruption and more lobbyists seeking government rents. Lower labor-market and regulatory freedom typically discourages business investment and raises the cost of living, which then can scare off Americans from other states looking to relocate for work.
There is strong evidence that states with more freedom attract more residents. The authors find a solid relationship between a lighter fiscal impact of government and net immigration, though evidence also suggests that regulatory and personal freedom play a role in attracting residents. For example, New York, the least free state, suffered the second-worst net out-migration of any state, 7.5 percent of its 2001 population. Conversely, Texas, Florida, and North Carolina, who rank among the top 20 in overall fiscal policy, have drawn nearly four million residents from the rest of the country from 2001-2014.
The study grades all fifty U.S. states on three dimensions—fiscal policy, regulatory policy, and personal freedom.
The fiscal policy dimension consists of five variables: (a) state tax revenues, (b) local tax revenues, © government employment, (d) government subsidies, and (e) government debt, each of which earns a significant weight because of its importance. The tax and debt variables are measured for each fiscal year, whereas the employment and subsidies variables come from different sources and are available for the calendar year. The authors separate state and local taxation and assign different weights to each.
The regulatory policy dimension includes categories for land-use freedom and environmental policy, health insurance freedom, labor-market freedom, occupational freedom, lawsuit freedom, cable and telecommunications freedom, and miscellaneous regulations that do not fit under another category.
The personal freedom versus paternalism dimension consists of the following categories: (a) incarceration and arrests for victimless crimes, (b) marriage freedom, © educational freedom, (d) gun rights, (e) alcohol freedom, (f) cannabis freedom, (g) gaming freedom, (h) asset forfeiture, (i) tobacco freedom, (j) travel freedom, (k) campaign finance freedom, and (l) other mala prohibita and miscellaneous civil liberties. Weighting these categories was a challenge because the observable financial impacts of these policies do not often include the full harms to victims.
Freedom in the 50 States is an essential work for anyone interested in state policy and in advancing a better understanding of a free society.