Tuesday , November 19 2019
Home / Mercatus Center / Ending the Economic Race to the Bottom: An Interstate Compact Is a Win-Win Solution to Subsidies

Ending the Economic Race to the Bottom: An Interstate Compact Is a Win-Win Solution to Subsidies

Summary:
Michael Farren testified before the Utah State Legislature’s Economic Development and Workforce Services Interim Committee at its September 18th meeting in Salt Lake City, Utah. His presentation explained how an interstate compact could help end the wasteful practice of recruiting corporations to the state by providing targeted economic development incentives. His presentation covered a brief history of targeted economic development subsidies (TEDS), described the core problems with TEDS (namely, that they don’t work, that they may actually slow local economic growth, and that they definitely lead to less national growth), and outlined why TEDS are still used despite these problems (because most nonacademic economic development research is a one-sided benefits-only analysis, and

Topics:
Michael D. Farren considers the following as important:

This could be interesting, too:

Tyler Durden writes Baltimore Taxpayers Fund Lyft-Rides For Inner-City Poor Facing “Food Deserts”

Tyler Durden writes Landmark Bill Would Bar State From Enforcing Federal Red-Flag Gun Laws

Tyler Durden writes “Biggest Fire Loss In Fort Lauderdale History:” Two Mega Yachts Worth Million Ignite In Fiery Blaze

Tyler Durden writes Sorry CNN, Here’s 25 Times Trump Has Been ‘Dangerously Hawkish’ On Russia

Michael Farren testified before the Utah State Legislature’s Economic Development and Workforce Services Interim Committee at its September 18th meeting in Salt Lake City, Utah. His presentation explained how an interstate compact could help end the wasteful practice of recruiting corporations to the state by providing targeted economic development incentives.

His presentation covered a brief history of targeted economic development subsidies (TEDS), described the core problems with TEDS (namely, that they don’t work, that they may actually slow local economic growth, and that they definitely lead to less national growth), and outlined why TEDS are still used despite these problems (because most nonacademic economic development research is a one-sided benefits-only analysis, and politicians face a “prisoners dilemma” that motivates them to offer subsidies). Policy solutions to this “TEDS dilemma” will be difficult, but an interstate compact offers a way for states to work together, and Farren’s presentation illustrates some basic elements that an effective interstate compact would need to include.

Leave a Reply

Your email address will not be published. Required fields are marked *