June, 2010

Voting with Their Feet: A Comparative Analysis of Two States and Their Respective Economic Policies' Effects on Their Populations and Economic Growth

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Technology today has made people and capital very mobile. To the extent a government’s policy environment restricts private businesses and individual incomes, significant numbers of private businesses and individuals migrate. Within this set of mobile emigrants are the entrepreneurs, ideas, and innovative businesses that drive economic growth. Texas and California are two heavyweight economies pursuing vastly different philosophies about businesses and individual incomes. This comparative microeconomic analysis will comprehensively explore existing research on the two states’ economic policy effects on these generators of economic growth, and will seek to answer why these two states have chosen nearly opposite policy paths and what the effects of these policies could mean for long-term growth.