#18 Alabama

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The overall freedom ranking is a combination of personal and economic freedoms.

From 2009

Alabama State Overview

State Facts

Net Migration Rate (?) 2 % 
Personal Income Growth (?) 1.93 %
How does the freedom ranking relate to these?


Alabama is one of the most conservative states in the country, especially socially. As might be expected, it scores very well on economic policy-especially taxation-but rather poorly on personal freedom.

Alabama is also one of the poorer states and accordingly receives a substantial share of federal funding. This allows the state to maintain one of the nation's lowest tax burdens, at 7.6 percent of personal income, while spending well above the national average: government consumption and subsidies are 12.4 percent of income. Government employment is also high, at 15.5 percent of private employment, while state and local debt is slightly lower than average, at 17.1 percent of income.

Alabama's court system ranks as one of the worst in the country according to the Chamber of Commerce survey (see part 1), but it has improved significantly since the first survey in 2001. Otherwise, the state scores reasonably well on regulatory policy, although it may lose ground in the next edition of the index because of harsh legislation aimed at undocumented immigrants passed after this edition’s closing date. Real property rights protection is strong due to flexible, decentralized zoning rules and comprehensive eminent domain reform. Labor laws are also market-friendly, with right-to-work in place. The health insurance market is relatively free, with far fewer mandates than the national average and virtually no price controls. Life insurance and property/casualty insurance are far more tightly regulated, however.

Alabama scores poorly on some important personal freedoms, especially on incarceration rates, in which it is over a standard deviation and a half worse than the national average, even though victimless crimes arrest rates are lower than average. It also scores poorly on marijuana laws, of which it has the very harshest in the country; alcohol laws, due to its especially high taxes on beer and spirits; and marriage freedom. It does well on a few other personal freedoms, however, such as tobacco and gun control-although the state has stricter gun regulations than some other states, especially for dealers and carriers of concealed weapons. It also does not limit campaign contributions.

Policy Recommendations

  • Reduce government employment and spending in areas where the state is above the national average, such as publicly owned hospitals, liquor stores, and utilities.
  • Move from partisan elected to non-partisan or appointed judges in order to further improve the quality of the state’s liability system.1
  • Eliminate mandatory minimum sentences for nonviolent offenders and otherwise reform the sentencing of nonviolent criminals. If Alabama only imprisoned the number of people one would expect given its (high) crime rate, its personal freedom rank would have improved from 45th to 27th.
1. Eric Helland and Alexander Tabarrok, “The Effect of Electoral Institutions on Tort Awards,” American Law and Economics Review 4, no. 2 (2002): 341—70.
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