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Striking A Balance: A National Assessment Of Economic Development Incentives, Mary Donegan, T. William Lester, Nichola Lowe
Striking A Balance: A National Assessment Of Economic Development Incentives, Mary Donegan, T. William Lester, Nichola Lowe
Upjohn Institute Working Papers
The use of incentive packages has intensified as local governments compete for new plants and corporate relocations, and as private firms increasingly demand a deal. While incentives promise jobs and tax revenue, scholars and practitioners criticize their high cost and limited accountability. Through a comparison of matched establishments, this paper explores how governmental incentive-granting strategy impacts incentive performance. We examine the overall impact of incentives and whether incentives granted to smaller firms perform better. Using economic development budget data, we also assess the state’s overall approach to economic development to determine which strategies are prioritized through funding. By showing that …
"But For" Percentages For Economic Development Incentives: What Percentage Estimates Are Plausible Based On The Research Literature?, Timothy J. Bartik
"But For" Percentages For Economic Development Incentives: What Percentage Estimates Are Plausible Based On The Research Literature?, Timothy J. Bartik
Upjohn Institute Working Papers
This paper reviews the research literature in the United States on effects of state and local “economic development incentives.” Such incentives are tax breaks or grants, provided by state or local governments to individual firms, that are intended to affect firms’ decisions about business location, expansion, or job retention. Incentives’ benefits versus costs depend greatly on what percentage of incented firms would not have made a particular location/expansion/retention decision “but for” the incentive. Based on a review of 34 estimates of “but for” percentages, from 30 different studies, this paper concludes that typical incentives probably tip somewhere between 2 percent …