THE MARKET FOR INDUSTRY: WHERE ANGELS FEAR TO TREAD?

This paper investigates one of the perennial mysteries in the area of state and local finance, the provision of tax and other subsidies to business by federal, state and local governments in the face of solid evidence that such incentives do little to nothing to influence business location or job creation. The paper looks at the upsurge in such governmental aid in the last decade and considers whether this upsurge has occurred because such aid is more efficacious than it used to be or whether it has occurred for political reasons unrelated to its effectiveness.