>How well run are each of the 50 states?
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At 24/7 Wall St.,
we recently completed one of the media industry's most comprehensive studies of state economic performance and financial management ever. We've looked at hundreds of data sets, ranging from debt-rating agency reports to violent crime rates, unemployment trends, and median income. Of those, we chose what we considered the 10 most important indicators of financial and overall government management. The standing of each state is supported by their ranking in
the data sets we considered.
Comparing the economic performances of the states is challenging, particularly with the volume of the data and the many ways it can be interpreted. Comparison is even tougher, given that state governments operate with advantages and disadvantages that may be decades old -- including the presence of natural resources, decisions by large companies to locate or leave, and the extent to which populations are rural or urban.
But ultimately, well-run states have a great deal in common with well-run companies: Books are kept balanced. Investment is prudent. Debt is sustainable. Innovation is prized. Workers are properly recruited and well-trained. Executives are chosen on the basis of merit.
We identified surveys with complete data sets for each state. Using this data, our formula ranked each state, giving weight to metrics that are most important to prudent governance. In addition to traditional fiscal information, including GDP per capita, debt per capita, and credit rating, our analysis also showed the impact of state policies on its residents. (Our full methodology can be read here
The intention of our "State of the States" report is that it might serve to refocus public debate on state-level management and financial operations. Especially in times of economic uncertainty, there are few, if any, more important considerations for state governments than the extent to which they can improve their management and, ultimately, control their own destinies.