The federal regulation and state enterprise (“FRASE”) index ranks the 50 states and the District of Columbia according to how federal regulations affect each state’s economy. Over the past 80 years, the federal government has increasingly relied on regulations as its primary legal output. Although federal regulation applies in the same way in all states, each state’s economy includes a unique mix of industries. As a result, federal policies that target specific sectors of the economy will affect states in different ways.
In its most recent edition, the Code of Federal Regulations (CFR), which annually compiles all current federal regulations, numbers more than 175,000 pages in 236 volumes. Those pages contain over one million individual restrictions that mandate or prohibit some activity. And those numbers are growing: by restriction count, the CFR is nearly twice as large as it was in 1975, as shown in figure 1.
FRASE uses RegData, a dataset that quantifies federal regulations by identifying individual regulatory restrictions in the CFR and estimating their relevance to different industries in the economy. FRASE weights the number of restrictions targeting each industry according to its importance to a particular state relative to that industry’s importance to the nation as a whole. For example, if an industry contributes twice as much to the state’s economy as it does to the nation’s, the restrictions count twice as much. The index sums the result across all industries in the state and scales to the score for the nation overall.
A FRASE index score of 1 means that federal regulations affect a state to precisely the same degree that they do the nation as a whole. A score higher than 1 means federal regulations have a higher impact on the state than on the nation, and a score less than 1 means they have a lower impact on the state.