Ohio's Economic Freedom Lags Neighboring States
According to the Economic Freedom of North America: 2004 Annual Report, Ohio’s economic freedom ranks near the bottom. In fact, Ohio ranks 40th out of all 50 U.S. states in terms of the impact of restrictions on freedom by state and local governments.
Economic Freedom Index
The Economic Freedom of North America is a joint publication of the Fraser Institute in Canada and the National Center for Policy Analysis in the United States. To determine the economic freedom index, the study uses three criterions: size of government, takings and discriminatory taxation, and labor market freedom. States are then ranked, with 1st being most free and 50th being least free.
On the subnational index, which measures only the impact of state and local government, Ohio ranks 36th or below in all three criterions. When compared to its neighboring states, Ohio’s economic freedom trails all but West Virginia. In addition, according to the report, Ohioans should be “saddened to know their effective state and local sales tax burden is well over the national average…." [1]
Economic Freedom and Economic Growth
Economic freedom is one of the biggest determinants of a state’s per-capita GDP. The ten freest states on average had a per-capita GDP of $36,237, while the ten least free states only had, on average, a per-capita GDP of $23,237. In addition, the freest states (except for Louisiana), “either exceed the United States’ average per-capita GDP or have been exceeding average economic growth…" [2] On the other hand, the least free states “either suffer from a GDP that is below the national average or that is declining…." [3]
Footnotes:
[1] Amela Karabegovic, Fred McMahon, Dexter Samidar and Glen Mitchell, Economic Freedom of North America: 2004 Annual Report (Dallas, TX: Fraser Institute and National Center for Policy Analysis, 2004), 34.
[2] Ibid, 3.
[3] Ibid, 3.
Nathan Dolezal is a Spring 2004 Intern with The Buckeye Institute.
