In February, I wrote a review of the annual Economic Freedom of the World report for 2025. Earlier this month, the report for 2026 was published. Last week, the Cato Institute published a similar report titled Freedom in the 50 States. Authored by Cato Institute economist Stephen Slivinski, the report compares freedom across the fifty states and covers not just economic freedom but also a wide range of freedoms. The report grades states on their performance in each category and also grades, in a nuanced way, the performance of each state’s governor.
The good news is twofold. First, many states have a fair amount of freedom. Thank you, Arizona. Second, because some states that do very well in some categories do badly in others, someone who cares more about particular kinds of freedom can use the study to decide whether or not to move. If, for example, you want to live where the government has minimal restrictions on housing but aren’t worried about law enforcement overreach, you might want to move to Idaho. Idaho ranks number one in housing freedom but comes in thirtieth on law enforcement overreach. On the other hand, if you are strongly concerned about law enforcement overreach but not very concerned about restrictions on building housing, you might want to move to New Mexico. New Mexico ranks number one in avoiding law enforcement overreach but comes in at twenty-fifth on housing freedom.
The bad news for those of us in California is that California ranks a dismal forty-fourth overall. Massachusetts is forty-eighth, New York is forty-ninth, and Hawaii is dead last.
The categories
The study’s author, Slivinski, writes:
Both the states and governors are graded on 97 policy variables spread across and grouped into 10 topic categories. (The scoring methodology is detailed in Methodology.) For each of the 10 topic categories examined, each state and governor is first awarded a percentage score based on how well they did on the individual metrics, then a freedom score based on that percentage, and then a letter grade based on that freedom score.
The ten categories are four that are listed under economic freedom—fiscal burden, housing freedom, occupational freedom, and tech and consumer freedom—and six that are listed under personal freedom: education reform, firearm freedom, freedom from law enforcement overreach, freedom of speech and association, medical freedom, and recreational freedom.
Fiscal burden
Clearly, the report contains a lot of moving parts. Let’s consider one category that we economists tend to write about: fiscal burden. The fiscal burden in a state, explains Slivinski, is very broad. It includes not just how much tax revenue is collected but also what form these taxes take, how much money the government spends, and how much debt the government issues. While the online study doesn’t give the specific numbers for each component, Slivinski has assured me by e-mail that those data are forthcoming.
Let’s consider how states rank on fiscal burden. Only four states earn a grade of A and they are, in order, New Hampshire, Florida, South Dakota, and Nevada. What do all these states have in common? No state income tax. For that reason, one might expect Alaska, with no income tax, to be high in the ranking. But Alaska is way down the list at thirty-eighth out of fifty. Why so low? The author explains:
That is because most of Alaska’s high level of government spending is financed by severance taxes on oil and gas exploration, which accounts for the lion’s share of the state government revenue. In other words, Alaska effectively exports most of its tax burden. Yet the state also maintains a much higher-than-average debt burden and government payroll, both of which materially contribute to the overall poor grade.
Given its high marginal tax rates, high sales tax rates, and substantial state government debt, California comes in at forty-seventh, better only than New Mexico, New York, and Hawaii.
Housing freedom
The components of housing freedom are ones that you might expect. Because governments, usually local governments, curtail housing freedom by putting barriers in the way of building auxiliary dwellings units (ADUs), colloquially referred to as “granny units,” and often require that houses sit on large lots, sometimes dictate a specific number of parking spaces for each home, and occasionally impose rent controls, housing freedom refers to the relative absence of these restrictions.
There is some good news here, even for California. In recent years, state governments, including California’s, have reined in the power of local governments to restrict the supply of housing. In Pacific Grove, California, where I live, I see the debate being played out in our two weeklies: the left-wing Monterey County Weekly and the center-right Carmel Pine Cone. I actually find myself occasionally more in sympathy with the left-wing weekly, which, at times, seems to want to open things up for development.
Ranking first in housing freedom is Idaho, and only two other states get A grades: Vermont and Montana. California, which probably would have ranked in the bottom ten a decade ago, now is at twenty-first.
Which states are in the bottom five? Mississippi, Minnesota, Alabama, Louisiana, and Michigan. I found all of that surprising, but that almost certainly reflects how ignorant I am about those states.
Education freedom
Another important category, listed as a personal rather than economic freedom, is education freedom. Education freedom, writes Slivinski, is a “measure of the degree to which a state protects the freedom of parents and students to choose the educational path—public, charter, private, or home-based—that best fits their needs.” Arizona ranks first, followed by fellow A earners Florida, Iowa, Arkansas, Oklahoma, and Indiana. Slivinski explains that these states have in common “a universal school choice program, broad open-enrollment policies that allow students to transfer between or within districts, comparatively strong charter school laws, and lightly regulated homeschooling options.”
California ranks thirty-first and Maine and Rhode Island are at the bottom.
One component missing from the education freedom variable is government expenditure on schools. A strong case can be made for ranking states lower, all else equal, the more the governments spend per pupil.
Overall freedom
Each state earns a grade based on all ten variables. As noted in the introduction, Arizona is at the top and California comes in at a dismal forty-fourth. Why is Arizona at the top? Because it earns high grades in five categories. Arizona is fifth in fiscal burden, third in tech and consumer freedom, first in education freedom, first in firearm freedom, third in medical freedom, sixteenth in freedom of speech and association, and twentieth or below in the other four categories.
California, by contrast, ranks in the top twenty only in two categories: law enforcement overreach, where it earns a respectable seventh place, and medical freedom, where it ranks fourteenth. Medical freedom includes the right to self-medicate, and that could explain why California ranks so high. In the eight other categories, California ranks twenty-first or lower, and in fiscal burden, it ranks forty-seventh, as noted above. California is forty-ninth in occupational freedom, giving a new meaning to the term “forty-niners.”
Why equal weights?
The overall measure of freedom is based on equally weighting the scores in the ten categories. That seems counterintuitive. In a related blog post, Slivinski argues that equal weights are justified “because all freedoms are equally important.” But are they? One of the Ten Pillars of Economic Wisdom I taught at the start of my economics classes is that the value of a good or service is subjective. The value you place on anything—and this includes freedom—is based on you. There’s no objective standard that says, for example, that firearm freedom ranks the same as education freedom.
The good news is that you can still find the freedom scores in each category useful. You can look at each of the ten categories and decide for each whether it’s worth 10 percent of the total score, 5 percent, or 15 percent.
Ranking governors
Freedom in the 50 States also ranks governors on the ten categories of freedom and overall. Slivinski explains that this is more complicated than ranking states because governors can favor more freedom or less freedom in each category and can act accordingly.
Slivinski notes that a governor of a state simply inherits the freedom rating of that state. So, he grades the governors based, in part, on the direction in which they have moved the state. He explains the details in the Methodology section of the study.
Because the governors are graded on their own actions, the rankings of governors differ from the state rankings. The top governor is Greg Gianforte, the Republican governor of Montana. Coming in second is Jared Polis, the Democratic governor of Colorado. The next nine governors in the rankings are all Republicans.
Interestingly, and probably not surprising to those who follow various governors’ actions on freedom, the bottom nine governors are all Democrats. California’s Governor Gavin Newsom ranks forty-eighth and New York’s Kathy Hochul comes in dead last. Before you get too excited about Republican governors, though, note that the top governor, Greg Gianforte, who earned an A, had a raw score of only 62.31 percent. Grading on a curve, anyone? Because the report ranks fifty governors, there is no median. But coming in twenty-fifth, with twenty-four governors above him, is Republican governor of Indiana, Mike Braun, with a score of 35.83 percent. Coming in twenty-sixth, with twenty-four governors below him, with a score of 34.42 percent, is Connecticut’s Democratic governor, Ned Lamont. Newsom earns a score of 22.23 percent and Hochul gets 18.02 percent.
Conclusion
Freedom in the 50 States will be useful to various groups: people who are considering moving from one state to another, voters who care about freedom and want to know how their states and politicians are doing, and politicians who might want to nudge their state a little closer to freedom. As teachers used to write on students’ report cards, there’s room for improvement. Indeed, even in the top states, there’s still massive room for improvement.
