New Hampshire has lost its title as the most economically free state in the union. The top spot this year goes to Florida, by a hair, according to the 2022 Economic Freedom of North America report released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
Florida scored 7.94 out of 10 in this year’s report (up from 7.78 last year), beating out second-place New Hampshire (7.84).
Economic freedom—the ability of individuals to make their own economic decisions about what to buy, where to work and whether to start a business—is fundamental to prosperity.
“As we’ve pointed out for years, Florida, Tennessee, Texas and other states are serious about gaining a competitive advantage over New Hampshire,” said Andrew Cline, president of the Josiah Bartlett Center for Public Policy. “If we want to have a New Hampshire Advantage 20 years from now, we have to stay focused on expanding economic freedom for all Granite Staters. If we rest on our past accomplishments, we will be left behind.”
Enhancing government control over individuals’ economic choices takes us in the opposite direction. But just as importantly, failing to move quickly enough to enhance economic opportunity for Granite Staters can harm New Hampshire too, as more aggressive states pass us by.
“When governments allow markets to decide what’s produced, how it’s produced and how much is produced, citizens enjoy greater levels of economic freedom,” said Fred McMahon, the Dr. Michael A. Walker Research Chair in Economic Freedom at the Fraser Institute and co-author of this year’s Economic Freedom of North America report, which measures government spending, taxation and labor market restrictions using data from 2020, the latest year of available comparable data.
Rounding out the top five freest states are South Dakota (3rd), Texas and Tennessee (tied for 4th). At the other end of the index, New York is once again the least-free state (4.25) followed by California (49th), Hawaii (48th) and Vermont (47th). For the first time, the U.S. territory of Puerto Rico was included in the index—its score in this first preliminary effort was 2.04. The least-free state’s score was more than twice as high.
Across North America, the least-free quartile of jurisdictions (including Canada and Mexico) had an average per-capita income of just $2,160 compared to $54,927 for the most-free quartile.
“Hundreds of independent studies have produced overwhelming evidence that higher levels of economic freedom are associated with more opportunity, more prosperity, greater economic growth and more jobs,” said Dean Stansel, report co-author and economist at Southern Methodist University.
The Economic Freedom of North America report (also co-authored by José Torra, the head of research at the Mexico City-based Caminos de la Libertad, and Ángel Carrión-Tavárez, director of research and policy at the Instituto de Libertad Económica (ILE) in Puerto Rico) is an offshoot of the Fraser Institute’s Economic Freedom of the World index, the result of more than a quarter century of work by more than 60 scholars including three Nobel laureates.
The report can be read here: EFNA-2022-US-POST
Detailed tables for each country and subnational jurisdiction can be found at www.fraserinstitute.org.