Red States vs. Blue States, Part VI

by Dan Mitchell | May 29, 2026

In my series on red states vs blue states (previous editions available herehereherehere, and here), I’m not taking sides between Republicans and Democrats.

Instead, I’m showing that states with market-friendly policies (lower taxes, less red tape, smaller government) outperform states with the opposite approach.

In our sixth edition of this series, let’s start with a chart from the Committee to Unleash Prosperity.

That’s a rather significant different over a quarter century of data.

To be fair, part of the reason red states have grown faster is “convergence.” Blue states historically were richer, so it’s natural to expect the gap to narrow.*

But part of the reason for the convergence – especially for the rapid convergence – is that there generally is more economic liberty in red states (as shown by Freedom in the Fifty States and Economic Freedom of North America).

I’ll close with this clever cartoon from the Atlas Society illustrates the impact of policy choices on economic performance.

*My clever left-wing friends will argue that per-capita incomes are higher in blue states, and that is true. But what they don’t want to acknowledge is that blue states became rich in the 1800s and early 1900s before they adopted leftist policies. Now that those states have become more statist, they are losing ground (the same is true for Europe’s welfare states).