America’s Founding Fathers left this nation more than a Declaration of Independence and Constitution. They left a framework for prosperity that helped make the United States the richest on earth. Indeed, Americans have grown richer despite government’s countless confiscations of revenue and property, unnecessary and frustrating regulations and often bureaucratic and expensive growth.

As research in the field of economic development has matured, so too have conclusions about what are necessary or sufficient conditions for a nation, state or province to prosper economically. Here in North America there have been a number of attempts to identify and measure such conditions in the states. The one that has been around the longest is the Economic Freedom of North America (EFNA) index, which recently released its 10th edition. The index is published annually by the Fraser Institute, a Canada-based research institute.

The EFNA compiles data on the size of government, taxation and labor markets. Within those areas there are 10 subcomponents. For instance, under size of government the index compiles data on government expenditures as a percentage of Gross Domestic Product and transfers and subsidies as a percentage of GDP, just to name two examples.

The authors ranked each variable on a scale of one to 10 and tallied up the score in each area. A score of 10 represented the most economic liberty, and zero the least. How has Michigan fared recently and over time? Through 2012 (the most recent year of available data), Michigan ranked 37th among its sister states. While that position is nothing to brag about, it is up dramatically — eight places — since bottoming out through 2009.

It should be noted, too, that the most recent 2012 dataset does not include any impact of the state’s right-to-work law, which took effect in 2013. The index itself does not include a right-to-work variable. Instead, it measures things such as union density.

The most economically free states in the union, according to the EFNA, are Texas, South Dakota, North Dakota, Virginia and New Hampshire. The least free were Maine, Vermont, Mississippi, New York and Rhode Island. The 25 percent of states considered most free by the authors enjoyed economic output per capita of some $55,000, compared to $48,200 for the bottom 25 percent.

In the top 10 most-free states, employment has grown by about 3.5 percent over the last five years, whereas it has essentially remained unchanged in the bottom 10. Over that same period, the economy has grown by more than 8 percent in the freest states compared to only 2 percent in the least free. That disparity between states is unlikely to be a coincidence and it is no small thing.

The Fraser Institute has looked at questions of economic freedom and well-being for three decades around the world, not just in North America. They have found a positive correlation between economic liberty and income, growth, longer lives, lower infant death rates, and even “development of democratic institutions, civil and political freedoms” and much more. Other independent scholars have as well.

Previous editions of the state-level index (EFNA) have been used in academic and other work — over 100 articles in peer-reviewed, scholarly journals to date — and on everything from education to tax-related policy work. Scholars tend to consistently find links between economic liberty and various positive outcomes such as higher economic growth and well-being.

The authors only wish they had space in this essay to present the full depth and breadth of the evidence to the reader on the importance of economic liberty. Maybe it is not necessary. Thomas Jefferson got it right without decades of university and other scholarship behind him in his first inaugural address:

… [F]ellow-citizens — a wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.

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Dean Stansel is an associate professor of economics at Florida Gulf Coast University and the primary author of the Fraser Institute’s Economic Freedom of North America index. Michael LaFaive is director of the Morey Fiscal Policy Institute at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the authors and the Center are properly cited.

For the first decade of the 21st century, the Michigan Legislature’s policy direction was to increase the power of government at the expense of citizens. The results were predictable to those who understand incentives and how economies really work.

From 2001-2010, compensation costs for the average state employee increased tremendously, while incomes plummeted for the taxpayers who pay those bills. When state revenues stagnated, the Legislature took more from individuals and small businesses through higher income and business taxes, and increased excise taxes on goods like tobacco.

Rather than enact real business-climate reforms that encourage investment and entrepreneurship, legislators turned to government central planning. The state’s corporate welfare arm, the Michigan Economic Development Corporation, grew in scope and power. This well-paid bureaucracy transferred ever larger sums from the market economy to politically well-connected industries in the form of selective tax breaks and subsidies. Open-ended film production subsidies exploded, redistributing about $500 million from state taxpayers to Hollywood producers since 2008.

With many failed promises and little transparency, the MEDC granted long-term deals to favored firms, gifts that keep on taking from Michigan taxpayers. In 2014 alone, the cost was around $860 million, and the budget bleeding will continue for years to come. By all objective measures, these programs have been a colossal failure.

Regulations and mandates also exploded. The number of criminal statutes continued to grow, while licensure and permit mandates were imposed on ever more occupations and activities. The state’s alcohol regulatory regime encourage both a distribution monopoly and price controls, leading to higher prices. In 2008, Michigan handed a virtual monopoly to big utilities while slapping a costly 10 percent “renewable energy” mandate on electricity generators – a double-whammy of inefficiency for consumers. Michigan is now one of the most regulated states when it comes to employment and has the highest electricity costs in the Midwest.

In 2010, Republicans were swept into office promising reform, taking the state House and governorship and expanding their majority in the state Senate. Over the next two years, the Legislature passed collective bargaining reforms for government employees, enacted education reforms that loosened teacher tenure laws and expanded school choice, cut business taxes, and scaled back some of the corporate welfare. Lansing mostly held the line on spending, eliminated project labor agreements that increase the cost of government construction, ended forced unionization schemes, required public employees to pay more for their health care and shored up their pension system.

The icing on this reform cake came at the end of the term, when Michigan became the 24th right-to-work state.

Voters returned the GOP to power in 2012, despite President Obama winning Michigan by 9.5 points. In the same election, voters defeated a series of ballot proposals that would have expanded government and union power.

But over the next two years, as the economy turned around, many legislative actions fell short of the limited government approach. The Legislature expanded a poorly performing welfare program by passing the Obamacare Medicaid expansion. The good news was, for the first time in a generation a governor and Legislature seriously engaged the problem of Detroit's finances rather than “kick the can down the road.” The bad news was, taxpayers were forced to bail out Detroit while city governance reforms were watered down. Corporate welfare schemes were renewed and expanded at a cost of about $300 million per year, and $50 million in annual film subsidies continue flowing down the drain. State spending increased by $2.7 billion. And the Legislature decided to place a proposal on the May 5 ballot that would raise $2 billion in new tax revenue while giving Michigan the second-highest sales tax in the nation.

The new Legislature has a choice in the path it wants to take. It should embrace and promote free enterprise and fiscal responsibility over the next two years.

Pass pension reform that would finally stop the unfunded liabilities from weighing down Michigan. Go through with the income tax relief that was previously promised. Save money by eliminating arbitrary prevailing wage laws and central planning programs. Eliminate licensing and regulatory barriers that unnecessarily impede entrepreneurs. Enforce the right-to-work law that is being ignored by school districts and unions across the state. Pass budgets that put taxpayers and citizens above the system.

Early indications show a House and Senate willing to tackle some of the tougher reforms. The House GOP "action plan," which lays out legislative priorities for the body, is excellent and would provide real reform.

But now the governing begins, and voters should be watching the Legislature to see which philosophy it decides to embrace.