You Don't Always Get What You Want: The Effect of Financial Incentives on State Fiscal Health.

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Bibliographic Details
Title:	You Don't Always Get What You Want: The Effect of Financial Incentives on State Fiscal Health.
Authors:	McDonald, Bruce D.¹ (AUTHOR) bmcdona@ncsu.edu, Decker, J. W.¹ (AUTHOR) jwdecker@ncsu.edu, Johnson, Brad A. M.¹ (AUTHOR) bajohn22@ncsu.edu
Source:	Public Administration Review. May2021, Vol. 81 Issue 3, p365-374. 10p. 3 Charts, 1 Map.
Subject Terms:	Monetary incentives, Fiscal policy, Value creation, Business expansion, Business relocation, Economic expansion
Abstract:	Governments frequently use financial incentives to encourage the creation, expansion, or relocation of businesses within their borders. Research on financial incentives gives little clarity as to what impact these incentives may have on governments. While incentives may draw in more economic growth, they also pull resources from government coffers, and they may commit governments to future funding for public services that benefit the incentivized businesses. The authors use a panel of 32 states and data from 1990 to 2015 to understand how incentives affect states' fiscal health. They find that after controlling for the governmental, political, economic, and demographic characteristics of states, incentives draw resources away from states. Ultimately, the results show that financial incentives negatively affect the overall fiscal health of states. [ABSTRACT FROM AUTHOR]
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Database:	Education Research Complete

Description
Abstract:	Governments frequently use financial incentives to encourage the creation, expansion, or relocation of businesses within their borders. Research on financial incentives gives little clarity as to what impact these incentives may have on governments. While incentives may draw in more economic growth, they also pull resources from government coffers, and they may commit governments to future funding for public services that benefit the incentivized businesses. The authors use a panel of 32 states and data from 1990 to 2015 to understand how incentives affect states' fiscal health. They find that after controlling for the governmental, political, economic, and demographic characteristics of states, incentives draw resources away from states. Ultimately, the results show that financial incentives negatively affect the overall fiscal health of states. [ABSTRACT FROM AUTHOR]
ISSN:	00333352
DOI:	10.1111/puar.13163