According to a forthcoming study, Washington ranks 31 st out of 50 states in economic freedom. "The U.S. Economic Freedom Index: 2004 Report," published by Pacific Research Institute (PRI) in association with Forbes magazine, is featured in the newly released "Best Places" issue of Forbes.
The Index ranks America's 50 states according to how friendly, or unfriendly, their governments are toward free enterprise. The report factors more than 140 variables - from taxes to environmental regulations to tort laws to property rights.
The rankings are based on five types of government intervention in markets: fiscal, regulatory, judicial, size of government, and welfare.
Many of the results are quite surprising. For example, Kansas ranks highest, while New York ranks lowest. The complete rankings are listed on the next page and on PRI's website: www.pacificresearch.org.
"Washington's low ranking is driven by its poor fiscal responsibility (36 th overall), and excessive size of government (40th), said WPC President Daniel Mead Smith. "These numbers show why WPC's Small Business Project, which examines roadblocks to small business success, is necessary."
The states with the most economic freedom tend to be in the Great Plains and Rockies. As a result, this region is developing prosperous centers of high-end services and information technology. The Northeast and Upper Midwest are most restrictive. Consequently, businesses and consumers are suffering there.
Two economists at Clemson University, Ying Huang and Robert E. McCormick, authored the study. The project director was Lawrence J. McQuillan, director of Business and Economic Studies at PRI.
Although scholarly in nature, the Index is written in clear English and is easily understandable. The Index is a valuable resource for lawmakers, journalists, and the general public. "This Index provides a much-needed metric to compare states on how they encourage or discourage free enterprise," says McQuillan. "It also suggests where future growth will occur - and where it won't."
The Pacific Research Institute and Washington Policy Center are members of the State Policy Network—the professional service organization for America's state-based, free market think tanks.
United State Economic Freedom Index, 2004 | |||
1 = Most Ecnomic Feedom; 50 = Least Economic Freedom | |||
State | Rank | State | Rank |
Alabama | 25 | Montana | 21 |
Alaska | 33 | Nebraska | 20 |
Arizona | 11 | Nevada | 12 |
Arkansas | 23 | New Hampshire | 7 |
California | 49 | New Jersey | 42 |
Colorado | 2 | New Mexico | 37 |
Connecticut | 48 | New York | 50 |
Delaware | 8 | North Carolina | 24 |
Florida | 22 | North Dakota | 18 |
Georgia | 19 | Ohio | 43 |
Hawaii | 35 | Oklahoma | 6 |
Idaho | 4 | Oregon | 29 |
Illinois | 46 | Pennsylvania | 45 |
Indiana | 14 | Rhode Island | 47 |
Iowa | 16 | South Carolina | 13 |
Kansas | 1 | South Dakota | 15 |
Kentucky | 39 | Tennessee | 26 |
Louisiana | 40 | Texas | 17 |
Maine | 30 | Utah | 5 |
Maryland | 27 | Vermont | 36 |
Massachusetts | 41 | Virginia | 3 |
Michigan | 34 | Washington | 31 |
Minnesota | 44 | West Virginia | 32 |
Mississippi | 28 | Wisconsin | 38 |
Missouri | 10 | Wyoming | 9 |
To arrange an interview with Lawrence J. McQuillan, please contact Carl Gipson at (888) 972-9272 or cgipson@washingtonpolicy.org.
About the Project Director
Dr. Lawrence J. McQuillan oversaw development of the "U.S. Economic Freedom Index." He is director of Business and Economic Studies at the Pacific Research Institute. Specializing in tax, budget, and regulation issues, his work has appeared in many leading publications - including the Los Angeles Times, USA Today, Forbes, and the Encyclopedia Britannica. He is a regular contributor to National Review Online and frequently appears on television and radio. He holds a Ph.D. in economics from George Mason University.
