The Ineffectiveness of Location Incentive Programs

Dafna Schwartz, Joseph Pelzman and Michael Keren
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Dafna Schwartz: Ben Gurion University of the Negev, dafnasch@som.bgu.ac.il

Economic Development Quarterly, 2008, vol. 22, issue 2, 167-179

Abstract: Many countries use location incentives programs to attract investment into a recipient country as a whole or to priority regions, with the goal of promoting growth. The authors focus on two cases, both involving location-related incentives programs, one to shift resources to disadvantaged regions within a country (Israel) and the other to shift investment flows from the United States to a possession (Puerto Rico). In both cases, the programs led to increased employment in the short run but did not alter the fundamental economic problems of these areas. The authors show that there is a governmental failure in their operation of location-related incentives programs and that these governments find it difficult to discontinue incentive programs once they have been introduced.

Keywords: location incentive; international investment; international business; regional development; economic development (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:ecdequ:v:22:y:2008:i:2:p:167-179

DOI: 10.1177/0891242408314100

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