Incentives in a New light: Enhancing the Effectiveness of State Economic Development through Policy Embeddedness Public Deposited

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  • March 20, 2019
  • Freyer, Allan
    • Affiliation: College of Arts and Sciences, Department of City and Regional Planning
  • This dissertation is driven by the policy problem of how to improve the effectiveness of state economic development programs. Recent research has shown that the institutional environment in which these programs are embedded deeply shapes their ability to produce successful outcomes. But less is understood about how this environment influences the effectiveness of one particular economic development strategy—the use of cash or tax incentives given to businesses by state governments to induce private investment and job creation. In this context, this study examines the impact of five specific institutional factors on incentive effectiveness: strategic planning; the integration of incentives with broader policy portfolios; the policy coordination of strategies within this portfolio; the regulatory and accountability framework that govern the use of incentives and generate norms around acceptable incentive practices; and the political environment in which incentive policy decisions are made, including the role of ideological competition and political coalitions Effectiveness is also studied in the context of equity—the extent to which these institutional factors influence the effectiveness of incentives when different lenses around equitable development are used. Variations in levels of economic distress, urban/rural areas, and various dimensions of political power are explored. In a case study analysis of North Carolina’s incentive policy decisions from 2007-2014, Paper 1 explores the extent to which ideological competition and partisan coalitions interact with the norms and standards associated with incentive accountability and the broader economic development policy environment to shape incentive policy decision-making. Paper 2 asks the question of why incentive deals fail. It uses a quantitative approach to test a series of hypotheses related to the effectiveness of a state’s incentive programs, including the effect of regulatory/accountability standards, industry targeting, and workforce development on the likelihood failure of incentive deals. The paper looks at two major geographic scales—the entire statewide sample of deals and those in economically distressed counties. Using a mixed methods approach, Paper 3 explores the question of whether the governance model used in a particular community’s sector-specific industry development strategy influences the effectiveness of its incentives. Specifically, it looks at decentralized approaches to policy coordination in North Carolina’s defense complex and related civilian applications in aerospace to see whether they suffer from the kinds of efficiency and coordination challenges that scholars suggest will hamper less centralized types of governance.
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Rights statement
  • In Copyright
  • Lester, T. William
  • Pearce, Lisa D.
  • Lowe, Nichola
  • Kaza, Nikhil
  • Feldman, Maryann
  • Doctor of Philosophy
Degree granting institution
  • University of North Carolina at Chapel Hill Graduate School
Graduation year
  • 2017

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