When we look at the degree of economic freedom in various nations, we find evidence that good policies produce good results.
Similarly, when we look at the degree of economic freedom in various states, we also find evidence that good policies produce good results.
So can we assume that there are better results in cities that have higher levels of economic freedom?
Let’s try to answer that question. The Pacific Research Institute has just published The Free Cities Index: A Pro-Growth Ranking of the 50 Largest Cities.
Here is how the cities score, from best to worst.
Unsurprisingly, California cities dominate the bottom of the list, along with poorly governed places such as New York City and Baltimore.
Here’s a description of the results, along with an explanation of the methodology.
…this study evaluates the state and local policy environment for the nation’s 50 most populous cities. Local policy environments can be judged using many criteria. In this case, the rankings are predicated on a pro-growth policy criterion, which means the localities are judged based on whether they levy less burdensome taxes on businesses and individuals, impose a less costly regulatory environment, and efficiently provide core public services. …Comparing the rankings to the population growth trends of the largest 50 cities illustrate a clear pattern – the cities with growing populations tend to maintain pro-growth policy environments while the cities with declining populations maintain anti-growth policies. Put differently, people, voting with their feet, are expressing their support for pro-growth policies. …Based on the methodology and data described in the previous section, of the 50 largest cities in the U.S., Fort Worth, Texas is ranked as having the most pro-growth environment and Oakland, California is ranked as having the least pro-growth environment.
Here’s a chart from the study showing a clear correlation between economic freedom and migratory patterns.
As you see, people are voting with their feet.
P.S. A professor at Southern Methodist University ranked economic freedom in metropolitan areas a few years ago and you’ll notice some overlap.
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Image credit: Fred Hsu | CC BY-SA 4.0.
