New Hampshire is the most economically free state in North America for the second year in a row, and the third time in four years, finds this year’s edition of Economic Freedom in North America, the annual report from Canadian free-market think tank the Fraser Institute.
New Hampshire scored 7.84 out of 10 in this year’s report (down from 7.93 last year), beating out second-place Florida (7.73).
“The New Hampshire Advantage has made Granite Staters more economically free than roughly half a billion other North Americans, from Nunavut to Chiapas,” Josiah Bartlett Center President Andrew Cline said. “From the simple idea that people should be left as free as possible to pursue their economic dreams, we’ve created a continental marvel.”
Rounding out the top five freest U.S. states are Virginia (3rd), Texas (4th) and Tennessee (5th). At the other end of the index, New York (50th) is once again the least-free state, followed by West Virginia (49th), Alaska (48th), California (47th) and Vermont (46th).
New England states were ranked as follows: New Hampshire (1), Massachusetts (18), Connecticut (25), Maine (37), Rhode Island (43) and Vermont (46).
The report measures the extent to which the policies of individual provinces and states in Canada, the United States of America and Mexico were supportive of economic freedom, the ability of individuals to act in the economic sphere free of undue restrictions.
Economic freedom—the ability of individuals to make their own economic decisions including what to buy, where to work and whether to start a business—is fundamental to prosperity.
“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 2018, the latest year of available comparable data.
From 2004 to 2018, the average score for U.S. states in the all-government index fell from 8.31 to 7.97. Across North America, the least-free quartile of jurisdictions had an average per-capita income 8.1 percent below the national average compared to 4.6 percent above the national average for the most-free quartile.
“Higher levels of economic freedom lead to more opportunity, more prosperity, greater economic growth, more investment and jobs,” said Dean Stansel, report co-author and economics professor 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) 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 U.S. edition of the report can be found EFNA-2020-US-POST.
Detailed tables for each country and subnational jurisdiction can be found at www.fraserinstitute.org.