By Gayle S. Putrich | Colorado Watchdog
Colorado ranks seventh among the 50 states in economic freedom, according to a study by Canada’s Fraser Institute, a libertarian policy group based in Vancouver.
Researchers examined 10 factors under each of three main categories, the size of the state government, labor market freedom and taxation, to determine Colorado’s economic freedom.
“Economic freedom means there’s not a significant restriction on an individual’s economic choices,” said Nathan Ashby, assistant economic professor at the University of Texas at El Paso and one of the authors of the study. Alberta, Canada ranked the highest in the North American study, followed by Delaware.
Although the index does not measure economic growth, its authors make the case that government policies, restrictions and tax rates impact financial freedom, which, in turn, affects local economic growth. So, high-scoring states typically have the lowest government spending, distortionary taxes and regulatory burdens.
“There is a significant relationship between economic freedom and economic growth,” Ashby said. “It’s been even more apparent in the recent economic climate. But we didn’t see any significant changes for Colorado… they were at the top last year when we made our calculation and they’re still on top,” Ashby said.
Gayle S. Putrich can be reached at [email protected]