(The Center Square) — New Hampshire is the freest state in the North American region, according to a new report, which cites the Granite State’s relationship between freedom and economic growth.
The latest edition of the Fraser Institute’s Economic Freedom of North America index ranked New Hampshire as the freest state, followed by South Dakota and Florida. New York is the least free state in the U.S., ranked just below California and Hawaii, according to the report.
The index, based on the latest economic data from 2022, ranks the 50 U.S. states, 10 Canadian provinces, and 32 Mexican states based on how free their citizens are to engage in economic activity. The index gauges the impact of government spending, taxes and labor market freedom.
Alberta is the highest-ranking Canadian province, tied in 12th place with the U.S. states of Tennessee, South Dakota, Colorado and Texas. The next-highest Canadian province is British Columbia, tied with Massachusetts, Minnesota and New Mexico for 43rd. The lowest-ranking jurisdictions are all Mexican states, including Ciudad de México, Colima, Campeche, Tamaulipas and Zacatecas, according to the report.
Among the three countries, U.S. states are freer on average, holding nearly every top 40 spot, according to the report.
The report’s authors said states that have taken steps to reduce regulations that restrict consumers’ choices or impose unnecessary burdens on businesses often have better economic outcomes for their citizenry.
“Economically free places tend to prosper,” they wrote. “Incomes are not only higher in economically free places, but they tend to grow faster in these places as well.”
From 2013 to 2022, the total income in the freest 25% of North American jurisdictions grew 29% after adjusting for inflation, they noted in the report. In the least-free jurisdictions, however, inflation-adjusted income fell 13%, according to the report.
The most economically free U.S. states also experienced faster population growth and more employment growth from 2013 to 2022, the data shows. Among the freest U.S. states, the population grew 10 times faster than in the least-free from 2013 to 2022. Total employment in these states also grew about three times faster than in the least free states during that same period.
“This evidence matches intuition: it makes sense that when individuals are allowed to make their own economic choices — guided by the market signals and incentives of prices, profits, and loss — they will tend to pursue opportunities that improve their lives,” the report’s authors wrote.
