States run by Republican governors boast highest economic growth rates

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Are Republican governors better for a state’s economy? Fresh evidence offers some tantalizing clues.

Nine of the 10 fastest growing U.S. states in the fourth quarter of 2013 were controlled by Republicans governors, according to the most recently available data from the Bureau of Labor Statistics. The BLS on Wednesday released a state-by-state comparison of GDP growth.

Six of the 10 worst-performing states, on the other hand, were run by Democrats.

North Dakota, in the midst of a fracking oil-boom, led the way with 8.4% growth in the final three months of 2013. Rounding out the top five were West Virginia, Wyoming, Louisiana and Nevada.

Only West Virginia, one of the nation’s poorest states, has a Democratic governor among the top 10 states.

The reasons why some states grow faster than others, of course, are varied and complex and often beyond short-term political control.

Most of the top performers are in the South and Southwest, previously underdeveloped regions whose economies have been stoked in part by soaring population growth. Other states like North Dakota have benefited from the fortuitous exploitation of abundant raw materials, primarily oil and gas.

Many of the slowest growing states such as Massachusetts and New York, by contrast, are older and more settled. They are also wealthier than the national average, however, and have higher percentages of residents with college degrees.

Other explanations for the disparity in growth include the level of taxes and regulations. Taxes in the South are lower, there are fewer unions and states in the region are more lightly regulated. So businesses have been keen to set up shop.

Economic legacy is also something that cannot be overlooked. Mississippi has been dominated by Republicans for more than a decade, but the historically poor state has not kept up with most of its Southern brethren.

In any case, the Republican advantage does not appear to be a one-quarter quirk. States led by Republican governors have also fared better since the end of the Great Recession in mid-2009.

Seven of the 10 fastest growing states, including the top seven, were run by Republican governors for all or most of the period from 2010 to 2013.

North Dakota again was No. 1 at 16.7% growth. The state was followed by Texas (7.1%), South Dakota (6.3%), Nebraska (6.3%) and Utah (5.8%).

What do MarketWatch readers think? Are Republicans better for your economy? Or are Democratic states better places to live?