Economic Freedom up slightly across U.S.; Nevada drops to 21st

LAS VEGAS—Nevada ranks 21st out of all 50 states in this year’s Economic Freedom of North America report, released today by Nevada Policy in conjunction with Canada’s Fraser Institute.

Last year, Nevada ranked 19th, which suggests Nevada is moving in the wrong direction, according to NPRI Policy Director Robert Fellner.

“Significant increases in government spending and taxation in recent years are responsible for Nevada’s declining economic freedom ranking. Lawmakers must reverse course so that all Nevadans can benefit from the opportunities and prosperity that result from a government that seeks to maximize freedom, rather than restricting it.”

This year, Florida has surpassed New Hampshire as having the highest level of economic freedom among all U.S. states. It scored 7.87 out of 10 in this year’s report, which measures government spending, taxation and labor market restrictions using data from 2016, the most recent year of available comparable data.

“The freest economies operate with comparatively less government interference, relying more on personal choice and markets to decide what’s produced, how it’s produced and how much is produced. As government imposes restrictions on these choices, there’s less economic freedom and less opportunity for prosperity,” said Fred McMahon, the Dr. Michael A. Walker Research Chair in Economic Freedom at the Fraser Institute and report co-author.

Rounding out the top five freest states are New Hampshire (2nd), Texas (3rd), Tennessee (4th) and South Dakota (5th). For the fourth year in a row, New York was ranked least free (50th), followed by Kentucky (49th), West Virginia (48th), California (47th) and Alaska (46th).

The report also includes an additional all-government ranking, which adds federal government policy to the index and includes the 50 U.S. states, 32 Mexican states and 10 Canadian provinces.

From 2004 to 2013, the average score for U.S. states in the all-government index fell from 8.24 to 7.66, but increased slightly to 7.9 out of 10 this year, driven largely by changes at the federal level.

In the most-free states, the average per capita income in 2016 was 7.3 per cent abovethe national average compared to roughly 10.5 per cent below the national average in the least-free states.

“The evidence is clear—lower levels of economic freedom lead to less prosperity, slower economic growth, less investment and fewer jobs and opportunities,” said Dean Stansel, economics professor at Southern Methodist University and co-author of the report.

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.

See the full report at www.fraserinstitute.org/economic-freedom.

Nevada’s scores in key components of economic freedom (from 1 to 10 where a higher value indicates a higher level of economic freedom):

  • Government spending: changed to 6.82 from 7.26 in the last year’s report.
  • Taxes: changed to 6.40 from 6.61.
  • Labor Market Freedom: changed to 5.68 from 5.54.

“This report should serve as a wakeup call to the Nevada Legislature. It should be the goal of all lawmakers to make Nevada the most economically free state in the nation, which is the most effective way to improve the well-being of all Nevadans.”

About the Economic Freedom Index

Economic Freedom of North America measures the degree to which the policies and institutions of countries support economic freedom. This year’s publication ranks 92 provincial/state governments in Canada, the United States and Mexico. The report also updates data in earlier reports in instances where data has been revised.

For more information on the Economic Freedom Network, datasets and previous Economic Freedom of North America reports, visit www.fraserinstitute.org. And you can ‘Like’ the Economic Freedom Network on Facebook at www.facebook.com/EconomicFreedomNetwork.

Media Inquiries

Media inquries should be directed to Michael Schaus, NPRI's Communications Director.
michael@nevadapolicy.org
(702) 222-0642