U.S. states that increase and achieve high levels of economic freedom tend to experience higher levels of economic growth

By Matthew D. Mitchell of The Fraser Institute. 

The correlation coefficient between changes in economic freedom and changes in inflation-adjusted per-capita personal income was 0.45 over the 2000 to 2022 period (from a footnote in the full report) 

• The index published in the Economic Freedom of North America report measures economic freedom in each of the 10 Canadian provinces, 31 Mexican states and Mexico City, 50 US states, and the US territory of Puerto Rico.
• This report contrasts the diverging economic fortunes of US state “liberators” and “repressors.”
• Liberator states achieve two distinctions. First, they increased economic freedom the most since the year 2000. Second, they became some of the most economically free states in the Union. Three states satisfied these two conditions: Idaho, North Carolina, and North Dakota. All three made most of their gains in the years after the Great Recession.
• Repressor states, on the other hand, saw the largest declines in economic freedom since 2000 and ended up as some of the least economically free states in the Union. Four states meet these criteria: California, Delaware, New Jersey, and Maryland.
• States that increase and achieve high levels of economic freedom tend to experience higher levels of real GDP growth (an average of 41 % among liberators since 2010 compared to 24% among repressors since 2010). They also achieve higher levels of statewide personal income growth (47% among liberators since 2010 compared to 26% among repressors).
• When it comes to income growth per person, however, increases in economic freedom seem to matter more than the ultimate level obtained.
• And when it comes to population growth, high levels of economic freedom over longer periods of time matter more than increases in economic freedom.