On the economics of incentives Waldo you are right. You can’t really find an economist willing to defend the economics of the current system. That said, there are a couple of questions to consider. At the state level who wants to “disarm” first in terms of incentives?

The EU has some efforts in place to regulate competition among members states. Pre-Reagan we had some things in place (e.g. a95 review)at the regional level that tamped down competition. But we were all full of Tiebout then and everyone had to compete and act like a market actor. Our crummy system of local government finance only serves to stimulate that further. Absent federal and state action action in “non-proliferation” I have a hard time buying into the complaints.

With regard to tax incentives, I agree: The overwhelming evidence is that providing tax breaks to attract businesses is almost always a money-losing proposal for states and localities alike.

“…Anderson has more than 20 years of experience in developing business organizations and promoting economic development…”

Really? What businesses did she start? What economic development does she claim credit for?

I ask this, not as a personal affront to Anderson, but I have often wondered about money spent by these various “economic development” agencies. They seem to be just another rat-hole for our tax dollars. More important, I would like to learn what the real economic impact of these efforts are, especially those that lure companies with tax incentives (thereby shifting the burden onto existing property and business owners).

I recall the self congratulatory mass back-slapping that went on when the City of Hampton got Gateway Computers to locate a factory there. As soon as the tax breaks ran out, Gateway was out of town like a flash.