The Political Economy of Corporate Welfare: Industrial Revenue Bonds

James T. Bennett and Thomas J. DiLorenzo
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Thomas J. DiLorenzo: George Mason University

Cato Journal, 1982, vol. 2, issue 2, 607-617

Abstract: Since the mid-1930s state and local governments have issued tax- exempt industrial revenue bonds (IRBs) to finance selected busi- ness enterprises. The original argument for the creation of IRB tax exemptions is the same as that for their present day continuation: Private capital markets allegedly "fail" to provide adequate financial resources to many firms, especially small businesses, and this inad- equacy reduces the economy's productive capacity and exacerbates unemployment. Each state, and nearly every major local government, now has an industrial development agency which sells IRBs. Although it is impossible to gauge accurately the total volume of IRB sales, since many are privately negotiated, the Congressional Budget Office estimated total sales to exceed $10 billion in 1981...

Date: 1982
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Persistent link: https://EconPapers.repec.org/RePEc:cto:journl:v:2:y:1982:i:2:p:607-617

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