Research Synthesis

Why Have Local Economic Development Policies Been So Disappointing, and Where Do We Go from Here?

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Abstract

State and local efforts to attract 'footloose' firms to their regions, through tax incentives or direct subsidies have largely proven ineffective in boosting population or employment.  Despite an extensive history of poor results, these  economic development policies remain a common fixture at the state and local level. Here we explain why these policies have proven ineffective and why the prospects for future success of business attraction policies ae almost non-existent. We then outline why continuation of traditional business attraction policies may divert public resources away from policies demonstrated to improve quality of life of existing residents. We then show that improvements in quality of life boost population and employment, and explain how a strong suite of quality of life policies will actually boost population and employment.   We recommend approaches towards redirecting state and local economic development policy towards quality of life programs, and away from disappointing business attraction policies that are currently the staple of local economic development.    

Keywords: Economic Development, Footloose Jobs, Business Attraction, Tax Incentives, Quality of Life

How to Cite:

Hicks, M. J., Weinstein, A. & Wornell, E., (2025) “Why Have Local Economic Development Policies Been So Disappointing, and Where Do We Go from Here?”, Reaching Regions 1(1). doi: https://doi.org/10.31274/rreg.18245