Each year 24/7 Wall St. publishes the results of its survey of all 50 states and then ranks them from top to bottom — from “best run” to “worst run.” CNBC does the same, only with a more concentrated focus on the business environment in each state, and then ranks the states on their overall “measure of competitiveness.” The Mercatus Center at George Mason University looks at all 50 states from the perspective of individual freedom and then ranks the states based on its Index of Personal and Economic Freedom.
The parallels and correlations between economic and business performance and personal freedom are clear and persuasive: When state governments stay within their limits of protecting lives and enforcing contracts, the states thrive. And vice versa. North Dakota and California are examples sufficient to prove the point.
Admittedly, says 24/7 Wall St.,
the successful management of a state is difficult to measure. Factors that affect its finances and population may be the result of decisions made years ago. A state’s difficulties can be caused by poor governance or by external factors, such as extreme weather.
That’s a nice way of saying that each state is different in its natural resources and may suffer, or thrive, depending on how they are allowed to be developed and utilized. It also means that a state may suffer, or thrive, on the basis of past errors or simple stupidity imposed on its citizens by politicians long passed into history.
Nevertheless, the effort is worth the candle:
It is the responsibility of each state to deal with the resources at its disposal.…
A state should be able to raise enough revenue to ensure the safety of its citizens and minimize hardship without spending more than it can prudently afford. Some states have historically done this much better than others.…
The best-run states have certain characteristics in common, as do the worst-run. The high-ranking states all have well-managed budgets. Each of the top ten has a perfect, or near-perfect, credit rating from Standard & Poor’s, Moody’s, or both. Of the ten worst-ranked, only three received top scores from one agency, and none from both.
North Dakota, for the first time, ranks at the top of 24/7 Wall St.'s study, mostly due to the state government’s hands-off approach to the development of its Bakken shale formation by private interests:
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