How Free Is North America?

NCPA December 19, 2013

The most-free jurisdiction in North America is in Canada, according to a study by Dean Stansel, a professor at Florida Gulf Coast University, and Fred McMahon of the Fraser Institute.

The study found the following:

• In the world-adjusted index (which is basically an "all-government" measurement, looking at restrictions by all levels of government, from federal to local), Alberta, Canada, ranked highest for freedom, followed by Saskatchewan. Delaware was in third place, followed by Texas. Prince Edward Island and Nova Scotia fell in last place, with West Virginia (57th) and New Mexico (58th) right behind. (Hawaii is 50th of 60.)
• Using a subnational index (only looking at state and local government restrictions), Alberta was still the most free, followed by South Dakota, Tennessee, Delaware and Texas. Saskatchewan came in 27th. The lowest-ranking U.S. states were New York and Vermont.
• The least-free quartile of jurisdictions in the world-adjusted index had an average per-capita gross domestic product (GDP) of $39,582, while the most-free quartile had an average per-capita GDP of $57,743.

The authors measured a variety of components to determine economic freedom levels: size of government, takings and discriminatory taxation, regulation, the legal system and property rights, sound money and freedom to trade internationally.

The 10 lowest-ranking states in the all-government index had an average per-capita GDP that was almost $10,000 less than the other 40 states ($40,014 compared to $49,355). Those states were New Mexico, West Virginia, Mississippi, Vermont, Maine, Kentucky, Montana, Arkansas, Hawaii and Rhode Island.

Source: Dean Stansel and Fred McMahon, "Economic Freedom of North America," Fraser Institute, 2013.