The 10 Most and Least Heavily Regulated States

Photo (cc) by Arete13

Do you believe that Uncle Sam’s watchful eye impact affects all Americans equally? Think again.

While the U.S. federal government’s regulations apply to all states, they affect some states a lot more than others, according to a new study out of George Mason University’s Mercatus Center.

The study says these differences come down to variations in each state’s economy:

… each state’s economy includes a unique mix of industries. As a result, federal policies that target specific sectors of the economy will affect states in different ways.

The most heavily regulated state is Louisiana, where the study found that the impact of federal regulation on state industries is 74 percent higher than the impact on the nation overall.

The main driver behind Louisiana’s ranking as the No. 1 most regulated state is the heavily regulated chemical products manufacturing industry, according to the study:

As Louisiana’s second largest industry, it represents 8.1 percent of the state’s private sector, more than three times the national average of 2.2 percent. Chemical products manufacturing is also subject to more than 10 times as many restrictions as is the median industry.

At the other end of the spectrum is New Hampshire, where the study found the impact of federal regulation on state industries was 32 percent lower than the impact on the nation overall.

New Hampshire’s largest industry is real estate, which constitutes only a slightly larger proportion of the state’s economy than the national average. The number of restrictions affecting the real estate industry is also close to that affecting the median industry.

The Mercatus Center study ranked each state based on what it calls a federal regulation and state enterprise, or FRASE, index score. The score is based on data about restrictions that are part of federal regulations.

Louisiana’s score was 1.74 while New Hampshire’s was 0.68.

The most heavily regulated states are:

  1. Louisiana
  2. Alaska
  3. Wyoming
  4. Indiana
  5. Kentucky
  6. Texas
  7. Nebraska
  8. West Virginia
  9. North Dakota
  10. Montana

The least heavily regulated states are:

  1. New Hampshire
  2. District of Columbia
  3. Rhode Island
  4. Massachusetts
  5. Vermont
  6. Oregon
  7. Maryland
  8. Maine
  9. Delaware
  10. Nevada

What’s your take on these study findings? Share your thoughts by leaving a comment below or on our Facebook page.

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