The index published in Economic Freedom of North America rates economic freedom on a 10-point scale at two levels, the subnational and the all-government. At the all-government level, the index captures the impact of restrictions on economic freedom by all levels of government (federal, state/provincial, and municipal/local). At the subnational level, it captures the impact of restrictions by state or provincial and local governments. Economic Freedom of North America employs 10 components for the United States and Canada in three areas: 1. Size of Government; 2. Takings and Discriminatory Taxation; and 3. Labor Market Freedom.
Not only is economic freedom important for the level of prosperity; growth in economic freedom spurs economic growth. As expected, the impact of economic freedom at the all-government level is typically greater than the impact at the subnational level since the first index captures a broader range of limitations on economic freedom than the second.
This is the eighth edition of the annual report, Economic Freedom of North America. The statistical results of this year’s study persuasively confirm those published in the previous seven editions: economic freedom is a powerful driver of growth and prosperity. Those provinces and states that have low levels of economic freedom continue to leave their citizens poorer than they need or should be.