Ideas in Development

Regarding job creation, the United States economy is the king. During the last few decades, it has overwhelmed our Western European competitors in sheer numbers. But it has not done as well in terms of job quality. A much higher percentage of new (and old) jobs pay less and provide fewer benefits and little security. The US is also losing many of the jobs that combined modest skills and good pay in manufacturing.

The 2006 Mid-term Elections have turned the American political and policy worlds upside down – or, may be right side up. Earlier this year, two of our friends and extremely bright economists authored two very accessible tracts on making the American economy a bit more just and decent. The chances of their proposals becoming reality are lots higher today. The first that I will discuss is Dean Baker’s The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer.

You might not normally think that books with the titles, The Economy Of Puerto Rico (2006) or Multinational Firms in the World Economy (Princeton University Press: 2006), would be mandatory reading for advocates of more accountable economic development programs in the United States. But they are. The Island nature of Puerto Rico and its ties to the United States make it a fascinating business climate “laboratory.” The latter study of multinationals includes data on transnational investments in both developed and developing countries, as well a comprehensive review of the foreign location literature.

An earlier article—Good Jobs, Part 1: What Are They and Why Are They Important?—sketched the problem of not having a large enough supply of good jobs in the American economy. This piece identifies a wide range of approaches to improve opportunities. Some, if done right, may work all the time. Others may work some of the time, but turned too tightly, could send the economy into a nosedive.

A “Smart Subsidies Audit” is a tool that enables state (or local) policymakers to hold their business incentive programs to a higher level of accountability, in regards to their transparency, fiscal integrity, cost-effectiveness and impact.