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Personal and Economic Freedom in the 50 States – New York Last, Again!

August 28, 2011

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Freedom in the 50 States

An Index of Personal and Economic Freedom
Jason Sorens, William Ruger | June 7, 2011

#50. (Worst) – New York (again!)

Executive Summary

This study comprehensively ranks the American states on their public policies that affect individual freedoms in the economic, social, and personal spheres. It updates, expands, and improves upon our inaugural 2009 Freedom in the 50 States study. For this new edition, we have added more policy variables (such as bans on trans fats and the audio recording of police, Massachusetts’s individual health-insurance mandate, and mandated family leave), improved existing measures (such as those for fiscal policies, workers’ compensation regulations, and asset-forfeiture rules), and developed specific policy prescriptions for each of the 50 states based on our data and a survey of state policy experts. With a consistent time series, we are also able to discover for the first time which states have improved and worsened in regard to freedom recently.

Purpose of the Index

This project develops an index of economic and personal freedom in the American states. Specifically, it examines state and local government intervention across a wide range of public policies, from income taxation to gun control, from homeschooling regulation to drug policy.

Measuring Freedom & Government Intervention

We explicitly ground our conception of freedom on an individual-rights framework. In our view, individuals should be allowed to dispose of their lives, liberties, and properties as they see fit, as long as they do not infringe on the rights of others.

Fiscal Policy

We divide fiscal policy equally into spending and taxation subcategories. These subcategories are highly interdependent; we include them both as redundant measures of the size of government.

Regulatory Policy

In this study, regulatory policy includes labor regulation, health-insurance coverage mandates, occupational licensing, eminent domain, the tort system, land-use regulation, and utilities. Regulations that seem to have a mainly paternalistic justification, such as home- and private-school regulations, are placed in the paternalism category.

Paternalism

In deciding how to weight personal freedoms, we started from the bottom up, beginning with the freedom we saw as least important in terms of saliency, constitutional implications, and the number of people affected, and working up to the most important.

Ranking & Discussion

By summing the economic freedom and personal freedom scores, we obtain the overall freedom index, presented in table 5. New Hampshire and South Dakota again find themselves in a virtual tie for first.

Conclusion

Although we hope we have demonstrated that some states provide freer environments than others, it would be inappropriate to infer that the freest states necessarily enjoy a libertarian streak, while others suffer from a statist mentality.

State Profiles

The state profiles (found through the above map) highlight some of the most interesting aspects of each state’s public policies as they affect individual freedom. In preparation for this year’s edition of Freedom in the 50 States, we conducted a survey of free-market policy analysts at think tanks associated with the State Policy Network (SPN).

Effects of the Federal Stimulus on State & Local Governments

This section assesses the consequences of the American Recovery and Reinvestment Act of 2009 (stimulus) for individual freedom, as affected by state and local policies. While the stimulus was passed immediately after the period covered by this study, we can use findings on the effects of federal grants on state policies to infer what the long-run consequences of the stimulus will be.

Comparison to Previous Indices of State-Level Economic Freedom

This project remains the only effort to code both economic and personal freedom in the 50 states. Other studies compare economic freedom or “competitiveness” in the states but do not treat other critical aspects of individual liberty or selectively subsume a few noneconomic issues within economic freedom concepts.

Construction of Index

We started by collecting data on state and local public policies affecting individual freedom as defined above. All of the statutory policies are coded as of January 1, 2009, the fiscal data are coded for the fiscal year 2007–2008, the law-enforcement data cover the entire year of 2008, and all data are also back-coded consistently to January 1, 2007 (FY 2006–2007). We omit federal territories.

Data Appendix

This data appendix contains a description of each variable used in the study and its location in our spreadsheets on the website, as well as a hierarchical summary of category, issue subcategory, and variable weights.

 

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