Is Minnesota really the fourth best governed state in the union?

Rankings of the states by various criteria seem to be a national pastime in the US. As I’ve written before, it is worth looking closely at how these rankings are constructed before trumpeting the headline finding. As case in point is 24/7 Wall Street‘s rankings of the ‘Best and Worst Run States in America‘.

This year Minnesota slipped from 1st to 4th on this ranking. This might explain the relative lack of media coverage compared to 2017. But Minnesotans shouldn’t take this too much to heart. After all, it is far from clear that 24/7 Wall Street‘s rankings of the Best and Worst Run States in America actually tell you very much about how well or badly the states are run.

24/7 Wall Street set out to measure how well run the states were; whether or not their politicians were doing a good job, in other words. So what variables would you pick to assess that?

The authors of this ranking include per capita tax collection, but it is not clear why a high tax burden should be a sign that a state is ‘well run’. The same goes for the use of the amount of welfare paid out, yet “For each state’s unemployment insurance benefits system we also considered average weekly benefit amounts and as a percentage of the average weekly wage”. How is an open-handed welfare system a sign that a state is ‘well run’?

Things get cloudier after that. 24/7 Wall Street go on,

From the U.S. Census Bureau’s 2017 American Community Survey we also considered a range of socio-economic factors to assess social outcomes and residents’ well-being. We looked at poverty, high school educational attainment, the percentage of adults without health insurance, median household income, and 1- and 5-year changes in median home value. Violent crime rates came from the FBI’s 2017 Uniform Crime Report. Annual foreclosure rates, measured as the number of housing units at some stage of the foreclosure process, were provided by housing market data tracker Attom Data Solutions and are for 2017.

It is difficult to see how some of these measures reflect whether Minnesota’s politicians are doing a good job. Median household income? One and five year changes in median home value? Annual foreclosure rates?

As I wrote last year, the 19th century poet John Godfrey Saxe is supposed to have said that laws were like sausages, people would like them less if they saw how they were made. The same goes for these sorts of rankings.

John Phelan is an economist at the Center of the American Experiment.