Governors Ranked by Economic Growth | Eastern North Carolina Now

    Publisher's note: This article appeared on John Hood's daily column in the Carolina Journal, which, because of Author / Publisher Hood, is linked to the John Locke Foundation.

    RALEIGH     In researching my upcoming biography of former North Carolina Gov. Jim Martin, I've been conducting personal interviews, rooting through boxes of archival material, and collecting press coverage of Martin's 26-year political career as a county commissioner, congressman, and governor.

    One of the most challenging tasks has been to assemble a comprehensive set of data on political, economic, and social trends in North Carolina. All politicians have strong incentives to, as the song goes, "accentuate the positive, eliminate the negative, and latch on to the affirmative" when talking about their time in office. To evaluate such claims, you need a baseline for comparison.

    Thanks to hard-working summer interns David Ribar and Trevor Pearce, I've got a good start on this baseline. While you'll have to wait for the book to get the full rundown, here are some early findings about economic performance during North Carolina gubernatorial administrations I thought Carolina Journal readers might find interesting.

    There are many different measures to choose from, such as average unemployment rates, job creation, and changes in personal income or GDP. Because North Carolina is embedded in a larger economy reflecting national and international trends, simply comparing state economic outcomes over time would tend to give excessive credit to governors who happened to serve during national booms and unfair blame to governors who happened to serve during national recessions. Moreover, North Carolina is part of a region, the South, that has on average experienced very strong economic growth since World War II for a variety of reasons, many entirely unrelated to contemporaneous policy decisions by state officials.

    So what we are really interested in is relative performance - how did North Carolina's economy perform compare to the economies of other states? Furthermore, because I wanted to compare as many governors as possible, measures that only dated back to the 1960s or 1970s wouldn't work.

    Based on these criteria, then, I came up with two useful metrics for evaluating North Carolina's economic performance during gubernatorial administrations: changes in total employment from the Bureau of Labor Statistics, which date back to the early 1940s, and changes in per-capita income from the Bureau of Economic Analysis, which date back to the late 1920s. Here are some initial findings:

• In employment, during only five of the 14 gubernatorial administrations since 1941 did North Carolina's rate of job growth exceed both the Southern and national averages. These administrations included Gregg Cherry, Luther Hodges, Terry Sanford, Dan Moore, and Jim Martin.


• In per-capita income growth, North Carolina exceeded both the Southern and national averages during eight of the 17 gubernatorial administrations since 1929. They included John Ehringhaus, Melville Broughton, Cherry, William Umstead, Sanford, Bob Scott, the second Jim Hunt administration, and Martin.

    The next step was to compute how much North Carolina's performance exceeded or trailed the Southern average (which was almost always a higher standard than the national average during this period) in both employment and income growth during each gubernatorial administration for which I had both measures. Then I averaged the two percentages. That yielded a preliminary list of the 14 administrations ranked by relative economic performance during each governor's tenure:

    #1 - Gregg Cherry (elected 1944)

    #2 - Jim Martin (1984)

    #3 - Terry Sanford (1960)

    #4 - Luther Hodges (assumed office 1954)

    #5 - Dan Moore (1964)

    #6 - Jim Hunt 2 (1992)

    #7 - Bob Scott (1968)

    #8 - William Umstead (1952)

    #9 - Jim Hunt 1 (1976)

    #10 - Melville Broughton (1940)

    #11 - Kerr Scott (1948)

    #12 - Jim Holshouser (1972)

    #13 - Beverly Perdue (2008*)

    #14 - Mike Easley (2000)

    A reasonable objection to this approach is that ranking gubernatorial administrations based on economic performance from inauguration to inauguration does not adequately account for lag time. It takes several months for a new governor to staff up a new administration and get his or her legislative agenda, including a new state budget, acted on by the General Assembly. Surely economic performance in, say, February 1985 was more reflective of the policies of Jim Hunt than the policies of Jim Martin, who had been in office for only a month. Here's what happens to the ranking if we shift the brackets forward by a year (i.e., Hunt is credited with 1985 and Martin with 1993). As you can see, it changes the ranks a bit:

    #1 - Jim Martin (1985-93)

    #2 - Luther Hodges (1955-61)

    #3 - Gregg Cherry (1945-49)

    #4 - Dan Moore (1965-69)

    #5 - Terry Sanford (1961-65)

    #6 - Kerr Scott (1949-53)

    #7 - Jim Hunt 1 (1977-85)

    #8 - Jim Hunt 2 (1993-01)

    #9 - Bob Scott (1969-73)

    #10 - William Umstead (1953-55)

    #11 - Melville Broughton (1941-45)

    #12 - Jim Holshouser (1973-77)

    #13 - Beverly Perdue (2009-11*)

    #14 - Mike Easley (2001-2009)

    Please keep in mind several qualifications about this list. First, remember that I'm not ranking these administrations according to sheer employment or income growth. I'm ranking them by relative performance, by growth rate compared to that of other states during the same period. For example, North Carolina's real per-capita income rose 18.2 percent under Gov. Bob Scott. Every subsequent administration has experienced a lower rate of per-capita income growth adjusted for inflation. But Southern states (17.6 percent) and the nation as a whole (12.4 percent) experienced strong income growth from 1969 to 1973, as well, calling into question whether policies or factors specific to North Carolina had much to do with the trend. (The 1960s, by the way, was easily the strongest decade of job and income growth North Carolina experienced during the period I studied. The 1970s were rough, the 1980s were strong, and then things began to slow down.)

    Another important qualification is that while journalists, voters, and historians inevitably judge politicians on the basis of what happens during their times in office, reality is more complicated than that. Within states, governors share policymaking power with the legislature (which in North Carolina is a particularly strong institution) and even with city and county officials. Moreover, some programs that governors and legislatures enact may have immediate economic effects while others, such as infrastructure and education, might take many years to come to fruition. On the other hand, governors did play a key role in managing the executive branch and recruiting business, even during the days before succession and veto.

    Rather than fixate too much on the political personalities involved, then, I'll conclude with an observation about chronology. Both in absolute terms and relative to regional and national trends, North Carolina's worst economic performance in modern history occurred during the Easley and Perdue administrations. Perhaps it wasn't because of their policies. Perhaps Easley and Perdue were just unlucky. Still, if you want to understand why North Carolina voters opted for dramatic change in 2010 and 2012, this one fact will get you a good way towards your destination.

    -30-

    Hood is president of the John Locke Foundation and author of the forthcoming Catalyst: Jim Martin and the Rise of North Carolina Republicans, which will be published one of these days.

• Because final data for 2012 and 2013 are obviously not available yet, Perdue's administration is ranked according to partial data only. I'll redo the ranking as soon as possible. By the way, this will be an interesting example of the split-power/time-lag qualification I discussed above. Preliminary data suggests that North Carolina's economy has improved its relative performance a bit since the Republican legislature took office in 2011. If that's what the final trend looks like, it will improve Perdue's ranking - regardless of whether she signed the relevant legislation.

    Hood is president of the John Locke Foundation, which has just published First In Freedom: Transforming Ideas into Consequences for North Carolina. It is available at JohnLockeStore.com.