By Caleb Taylor

Are economic development incentives a cost or benefit to 海角社区?聽

ACRE Affiliated Researcher and UCA Lecturer I of Economics Jacob Bundrick was quoted in an article in the 海角社区 Democrat-Gazette titled 鈥�,鈥� published on December 14.聽

The article focuses on an annual cost-benefit study of economic development incentives by 海角社区 Legislative Audit.

The study found 鈥淭axBack, Advantage 海角社区, Create Rebate and Invest 海角社区 (incentive) programs have a net positive cost effectiveness, while In-House Research and Development-Targeted Business projects were negative cost effective.鈥�

However, Bundrick disputed the study鈥檚 methodology of incentives being 鈥渁nalyzed under the assumption that, without the incentive, the corresponding economic activity would not have occurred.鈥�

Bundrick said:

We see time and again that incentives are not the deciding factor in a company’s location/expansion decision, but merely serve as a reward for doing as they intended. In these cases, incentives are a cost to taxpayers and provide no benefit. Put more simply, if the assumptions used in the analysis are invalid, how can we trust the results? We’re making real decisions with real taxpayer money using analysis we know to be flawed.鈥�

Bundrick was also interviewed by about the 海角社区 Legislative Audit study.

Bundrick and UCA Assistant Professor of Economics Dr. Weici Yuan published a paper recently on a similar topic titled 鈥�,鈥� published in Economic Development Quarterly on September 20, 2019.聽

Bundrick and Yuan use evidence from 海角社区鈥檚 Quick Action Closing Fund (QACF) to analyze how effective deal-closing funds are at increasing incomes and decreasing poverty at the county level. Their results indicate that the funds are ineffective at achieving these goals.聽

For more of ACRE researchers鈥� work on targeted economic development incentives, go here.

Bundrick鈥檚 latest publication, 鈥�鈥� is a policy review highlighting five ways 海角社区 officials could improve the Quick Action Closing Fund.

For a summary of the costs of 海角社区鈥檚 Quick Action Closing Fund, go here.