Ideas in Development

Why an independent review of the state's employment and fiscal model is still needed

Given the price tags of recent subsidy deals with footloose business facilities, CFED and the NC Justice Center still believe strongly that North Carolina’s employment and fiscal cost-benefit model needs a thorough independent review that builds on our own initial evaluation of the model’s design and applications.

There are many ways to grow an economy beyond using subsidies to recruit footloose facilities.

Attraction efforts are supported intellectually by so-called export base theories. But the authors of this paper regard the export base perspective as more of a mechanism (and symptom) of growth, not a good theory of economic development. ¹

So-called “new growth theory” (aka: endogenous growth theory), which is increasingly becoming a widely-held view among economists of all political persuasions, instead emphasizes that economic growth is a product of innovation and new ideas.

Helping the poor, dislocated workers, new immigrants, single parent families, minority youth and others to advance to greater self-sufficiency and ultimately to middle class socioeconomic status is affected by scores of polices.  On the federal side, monetary and fiscal policies, trade agreements, and the use of affirmative action strategies are just a few examples. 

This article has just one simple purpose: provide the reader with a fairly comprehensive map of policies at the state level that could increase a citizen’s economic well-being.  The list below includes economic development programs, along with much, much more.

Another way to get a sense of the costs and benefits of other economic development and employment programs relative to the use of business incentives is to follow a hypothetical example created by Professors Alan Peters and Peter Fisher at the University of Iowa.  They reason as follows:

A Book Review of “State of the Unions”

Philip Dine’s “State of the Unions” has a subtitle that says it all: “How Labor Can Strengthen the Middle Class, Improve Our Economy, and Retain Political Influence.” 

Dine has covered the union beat for the St. Louis Post-Dispatch for more than two decades.  His new book is a well-written, fairly comprehensive look at trade unions, who have now shrunk to 12% of the American workforce, but are making some progress in reaching  white and blue collar workers, ranging from doctors and nurses to janitors and catfish processing workers.

Bill Schweke

Are There Grounds for New Hope

At least from a reformer’s perspective, 2006-2007 were not really great years in the history of incentive accountability, transparency and cost-effectiveness.  The state of North Carolina is now a “leader” in size and heterogeneity of incentive packages.  Companies, consequently, are responding by raising their expectations, asking for more money and keeping certain issues “hush-hush.”