Has any global or national institution ever attempted to produce a scholarly analysis of economic well-being and ranked the likes of North Korea, Cuba or Venezuela as top performers? Has any scholar argued that the determinants of economic growth lie in the purest of socialist systems? If so, we haven’t seen them.
Scholars from the Fraser Institute and elsewhere, on the other hand, have marshalled enormous amounts of data to study the impacts from economic liberty. They began by looking at freedom levels in different nations, and researchers found associations between countries’ freedom scores and measures of well-being. These same researchers likewise looked at economic liberty (or a lack thereof) in subnational units of government, such as American states and Canadian provinces. Likewise, scholars found many positive associations between economic freedom and well-being.
More recently, and including this study, scholars have begun to find similar positive outcomes between where local governments rank in indices of economic liberty and important metrics such as income, employment and population growth.
Our study presents a clear picture of how Michigan MSAs can improve their economic well-being: increase overall and labor market freedom by reducing policy and regulatory burdens. The big takeaway is that the myriad correlations we’ve identified between local economic freedom and well-being are unlikely to be coincidental.
Policymakers who want to effect positive outcomes, such as lower unemployment rates and a growing population, would do well to study the findings of this and related papers closely. They should adopt the policies demonstrated to improve the economic well-being of their inhabitants and eschew those that don’t. Michigan residents deserve better policy at each level of government.
Our findings also demonstrate that Michigan has a long way to go —its local economic freedom scores and measures of well-being fall short when compared to other states. Only one MSA in the state — Midland — outperformed the average of America’s 383 MSAs and that was only by a statistical whisker. Michigan’s local policymakers should not accept mediocrity. The path to higher freedom scores, lower unemployment, and job and population growth can be found in the variables referenced in this study.
The policy prescriptions we offer should be as clear as the correlations we’ve identified. Keep tax and regulatory burdens light and restrain bureaucratic growth in government. These may seem mundane to some policymakers, but history and evidence demonstrate that exotic central planning schemes aren’t necessary to facilitate economic well-being. Just restraint in the administration of good government goes a long way to promote broad economic growth.