Via Clawback, we see a new study by the Public Policy Institute of California that finds that the state's enterprise zones have no overall effect on job growth. That's in line with findings in other states, including Minnesota, that offering tax credits and other incentives to businesses may raise employment in certain areas, but not within the region, because companies move from zone to zone to take advantage of the incentives.
The same might be said about what Federal Reserve economist Art Rolnick has called "the economic war between the states."
Still, states hungry for jobs are willing to pay "front money" to untethered corporations, even while shortchanging other services that would make their states more attractive in the long term. In another post, Clawback provides recent examples of how states can shuffle federal stimulus money to pay these incentives.
Says Growth & Justice Policy Fellow for Infrastructure & Economic Development, Matt Kane:
The public sector should pursue economic development policies that result in broad benefits for residents and businesses in the region, especially benefits that will continue to have a positive impact even if specific businesses close or move.
— Charlie Quimby