Fairmont Sentinel (Fairmont, MN), September 25, 2008

According to the Pacific Research Institute (www.pacificresearch.org), which ranks economic freedom in all 50 states, South Dakota ranks No. 1 for 2008. While that may not immediately impress you, consider: When one state reforms, it puts pressure on its neighbors to do likewise, or they will find themselves at a competitive disadvantage for attracting businesses, capital and people. So notes Lawrence J. McQuillan, the project director for Pacific Research Institute.

The Institute notes that since 2004, the last time it ranked the states, the Upper Midwest has been going through something of an "economic freedom renaissance." South Dakota jumped 14 places to No. 1. Meanwhile, Minnesota, Illinois and Wisconsin leaped 18, 19 and 20 places, respectively. Minnesota, which ranked No. 43 in 1999 and No. 44 in 2004, has moved up to No. 26 on the list. Not great, but certainly better than places like New York, which consistently ranks No. 50.

The Institute examines 143 indicators per state and five data sets: fiscal, regulatory, judicial, government size and welfare spending. Each state then ends up with a score from 1 (most free) to 50 (least free). These scores are more important than the ranks, obviously, because there would be very little freedom anywhere if the range of scores were between, say, 40 and 50. Fortunately, a state like South Dakota comes in with a score of 14.54, meaning it is much closer to full economic freedom than not.

Minnesota's score is 20.92. Iowa's is 19.88. New York's is 27.39.

While the Institute's scores are just one measure of economic freedom, the day-to-day decisions and long-term planning taking place in the real world are reflected in them. Businesses, workers, governors and state lawmakers may not know the scores, but they know how their states and how their neighbors compare. Again, a state that is (more) free pulls along liberty via competition. Thanks, South Dakota.