Now, here are the reasons, absent evidence, rhetoric, or polemic:

French economist Daniel Cohen’s books on today’s economy deserve wide readership among policy makers, activists and intellectuals.

Hardly a household name or common feature of the American talk show circuit, (or is the proper word “circus”?), economist Daniel Cohen has authored a series of readable, challenging and illuminating works. He is a master of the book-long essay and is big on irony.

Cohen’s core arguments and diverting digressions offer little ideological solace to right or left. Both views are found wanting. Solutions that he proposes tend to draw from each side of the political spectrum.

Edited by Alan Jenkins and Brian Smedley, All Things Being Equal: Instigating Opportunity in an Inequitable Time, is the first publication of a new organization that they run, The Opportunity Agenda.

Now, there is the fundamental question.  Do they work?

What Are The Costs And Benefits Of Using Incentives To Attract Business?

Benefits

Particularly from the perspective of a state or local economy, there are a number of benefits from using tax and non-tax incentives to attract businesses.

Development incentives can help a state or locality attract a desirable business prospect. This is because, on the margin, when it comes down to two or more equally satisfactory sites, a superior incentive package and “red carpet treatment” can clinch a deal.

Today, we are examining the nature and popularity of business incentives and attraction strategies.

Is Economic Development The Same As Business Recruitment?

What about business attraction efforts?  Why did our discussion about policy levers leave them out of the mix?  Isn’t economic development the same as business recruitment? 

No.  Business recruitment is simply a critical and extremely common strategy for promoting economic development.  We regard them as tool or strategy, not policy lever, for the purposes of this article.

Fresh thinking is required about the way economic development is heading in the United States. We have to move the debate about business climate away from simplistic notions of tax competitiveness or “getting the government off our backs” to focus on the real disincentives to economic competitiveness and opportunity. We explore six critical policy “levers” for creating a better business climate: education, physical infrastructure, regulation, taxation, development incentives and modernization.

Education

The pressures associated with the bidding wars and the “cut-taxes-and-deregulate” lobby lead to policy “on the fly.”   Decisions are made in an un-strategic fashion and long-term consequences are rarely considered. Recruitment efforts focus on doing the deal and tax adjustments are made on the basis of political calculus. It is time to set out some basic principles that should inform economic development policies and programs.

We offer seven for starters.

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.”

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.