Economic Development and incentives: a race to the bottom?

We’ve been picking up the ongoing debate over economic development incentives this week, starting with insights from Bill Lutz on analyzing the results of incentives and from Kathy Dodson on taking a leadership role and resolving to Do No Harm.  But the discussion over this issue has been much broader than two people writing in splendid isolation, and I wanted to share with you today a snippet of that debate, in all its messy glory.

Ed Morrison of Purdue University posted a power question on the LinkedIn group Economic Development 2.0 last month, shortly after the New York Times series analyzing the cost and effectiveness of incentives nationally hit the press.  Ed has been one of the powerful and insightful voices challenging the way the incentives game is often played for a long time, and he came out in full force in this discussion.  The interesting thing to me, though, was the range and diversity of the conversation that developed there, with about 20 people contributing to the debate.  Some supported incentives, some spoke against them, but the conversation makes for a fascinating examination of the state of the incentives issue among persons in the trenches.

This particular string of the discussion has, as of the last time I looked, runs to… over 120 comments.   That’s a lot to try to wade through (take my word on that one).

I’ve managed to distill the main thread of the conversation down to a few pages instead of the 60 I had when I first did the cut and paste, but it’s still considerably longer than anything resembling a normal blog post.  Instead of inserting it here, you can download a PDF of my edited version here.  Please note that, since I haven’t asked anyone for permission to reprint their comments, I have removed the names, leaving initials so that you can at least get a sense of the different voices.

Here’s the edited version of the discussion:

Economic Development Race to the Bottom (edited)

As I noted before, the NYT article and the debate hit in the Month of Total Rucker Chaos that December usually represents, so my personal ability to participate in this debate so far has been limited.  Lord willing and the creek don’t rise, that will change tomorrow.  Stay tuned.

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