 Affiliated faculty Working papers Research notes Conference External links |
||
 |
||
Local Government Competition for Economic Development
URAG Working Paper #03-07
Local Government Competition for Economic Development (pdf)
by Kelly Edmiston and Geoffrey K. Turnbull, August 2003
Keywords: interjurisdiction competition, tax abatement, firm location
This paper examines the factors driving community tax incentives for industry recruitment. The empirical results show that spatial competition among Georgia counties is an important factor determining their propensity to use fiscal incentives. The proximity effect is robust and diminishes with distance. In addition, we find that county governments use fiscal incentives to compensate for higher taxes and that higher income jurisdictions do not tend to forestall nonresidential development (and its attendant externalities). Interestingly, neither economic diversification nor government form affects development policies. It also appears that fiscally troubled local governments cannot sustain the short term costs of aggressively recruiting industry in order to garner the long term benefits.
Comments and questions regarding this paper may be directed to Geoffrey K. Turnbull.