New Hampshire ranks as the freest state in North America, as measured in this year’s Economic Freedom of North America report, released today by the Josiah Bartlett Center for Public Policy in conjunction with Canada’s Fraser Institute.
For the 24th time, New Hampshire is the freest state among all U.S. states, having scored 8.34 out of 10 in this year’s report, which measures government spending, taxation, regulations and labor market restrictions using data from 2023, the most recent year of available comparable data.
The report ranks states and provinces within their countries and, separately, across all of North America. New Hampshire tops both lists, but the margin of victory in the United States is shrinking.
Among U.S. states, Tennessee, ranked the second-freest in this year’s report, finishing just four hundredths of a point behind New Hampshire, with a score of 8.30.
“Economic freedom has made New Hampshire an engine of growth and prosperity in the Northeast, and ranking first in North America for the 24th time is a welcome recognition of the hard work of so many legislators over the decades to turn New Hampshire into the continent’s freest political jurisdiction,” said Josiah Bartlett Center President Andrew Cline. “Yet this year’s report is also a warning that ambitious leaders in other states are striving to claim the title of freest state for their own recruitment and marketing purposes, and they’re very close to doing that.”
Tennessee, No. 2 in this year’s report, abolished its Hall income tax, similar to New Hampshire’s Interest & Dividends Tax, in 2021. New Hampshire abolished its Interest & Dividends Tax in 2025, a change that won’t be reflected in the rankings until 2027, as the rankings are based on government data sets that take time to complete.
Since the Fraser Institute began publishing its Economic Freedom of North America Index two decades ago, the Granite State has ranked No. 1 in 24 of the 27 years studied in the international freedom index. It has ranked No. 1 in 24 of the 43 years covered in the U.S. freedom index.
The individual state rankings show that New Hampshire scores highly on government spending and taxes, but is closer to the national average on labor market freedom. To maintain New Hampshire’s position, policymakers should look to the state’s labor market regulations for reform opportunities.
Economic freedom is a core value of the Josiah Bartlett Center for Public Policy not only because it is morally right, but because it produces superior results.
“People are more economically free when they are allowed to make more of their own economic choices. Researchers find that as government limits these choices, people tend to be worse off,” said Matthew Mitchell, a senior fellow at the Fraser Institute and co-author of the report.
Rounding out the top five freest states are Tennessee (2nd), South Dakota (3rd), Texas (4th) and Idaho (5th). Once again, Puerto Rico came in last with a score of 1.74 out of 10. The least free U.S. state was New Mexico. The next lowest was New York (49th), behind Hawaii (48th) and California (47th). This is the first time in nearly two decades that New York did not finish last in the report.
“The link between economic freedom and prosperity is clear. People who live in jurisdictions that have comparatively low taxation, limited government and flexible labor markets tend to live happier, healthier and wealthier lives,” said Dean Stansel, economist and research associate professor at Southern Methodist University and co-author of the report.
The Economic Freedom of North America report is co-authored by José Torra, the head of research at the Mexico City-based Caminos de la Libertad, and Ángel Carrión-Tavárez, director of research and policy at the Instituto de Libertad Económica in Puerto Rico. It is an offshoot of the Fraser Institute’s Economic Freedom of the World index, the result of more than a quarter century of work by more than 60 scholars including three Nobel laureates.
See the full report at www.freetheworld.org.
New Hampshire’s scores in key components of economic freedom (from 1 to 10 where a higher value indicates a higher level of economic freedom):
§ Government spending: 1
§ Taxes: 3
§ Labor Market Freedom: 18
Tennessee’s scores in key components of economic freedom:
§ Government spending: 3
§ Taxes: 22
§ Labor Market Freedom: 7
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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of think-tanks in 87 countries. Its mission is to improve the quality of life for Canadians, their families and future generations by studying, measuring and broadly communicating the effects of government policies, entrepreneurship and choice on their well-being. To protect the Institute’s independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org
The Josiah Bartlett Center for Public Policy is a non-partisan free-market think tank based in Concord. Its mission is to develop and advance practical free-market policies that promote opportunity and prosperity for all. Visit www.jbartlett.org.
The Economic Freedom of North America report (also co-authored by José Torra, the head of research at the Mexico City-based Caminos de la Libertad) is an offshoot of the Fraser Institute’s Economic Freedom of the World index, the result of more than a quarter century of work by more than 60 scholars, including three Nobel laureates.
Detailed tables for each country and subnational jurisdiction can be found at https://www.fraserinstitute.org/studies/economic-freedom-north-america-2025.
The full study can be downloaded here: EFNA 2025 US.
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