This is the Cato Daily Podcast for Friday, August 12, 2022.

I'm Caleb Brown. Is your state business friendly?

Does that status seem to hinge on flashy handouts to big companies making big promises. It may be less

sexy but better policy for lawmakers to focus on more core elements of making a

city or state attractive. Peter Caligano, director of the Center for Public Choice and Market Process of the College of Charleston,

details some of his research in this area.

What is the record generally on state-level economic development?

I mean, I call them giveaways because there clearly exists to benefit some specific company with promises exchanged about jobs,

about the size of the plants, construction, any number of other things.

What's in general the performance of those promises?

Performance has been that unemployment rates don't generally decline, right? We don't see huge

growth rates. We do not see even large tax revenues as promised by these things, right? So the record is horrible on these in terms of

actually doing the things that they predicted. The number of jobs that they promise seems to be the

best indicator of whether or not you're most likely to receive these subsidies or these tax breaks.

But even the number of jobs that are promised never meet up to the standards that they are first set out at.

So the big one that I can recall right now is FoxCon in Wisconsin.

And that was obviously a massive failure of the state engaging in these

kind of giveaways but a lot of these are smaller they they don't really, they sort of fly under the radar, who benefits

from them generally?

So the economic benefits not there, the benefits are all political and this is an argument I've been

making for quite a while is that this is a way for politicians to be able to

demonstrate that they are quote unquote doing something.

...