Pandering Politicians? Targeted Economic Development Incentives and Voter Response

Jacob Bundrick, Erica Smith and Weici Yuan

Public Finance Review, 2021, vol. 49, issue 5, 673-716

Abstract: Empirical evidence largely suggests that the billions of dollars state and local governments spend on targeted economic development incentive (EDI) programs are typically ineffective at stimulating broad economic activity. The continued use of EDIs by public officials has thus led scholars to investigate the role of these programs in political pandering. In this paper, we explore the relationship between EDIs and gubernatorial elections in Arkansas. Specifically, we investigate whether officials strategically allocate discretionary EDIs based on previous county-level gubernatorial election outcomes. We subsequently explore the impact of discretionary EDIs on an incumbent party’s bid for gubernatorial reelection at the county level. Our results largely suggest that public officials do not allocate EDIs based on previous election outcomes. Moreover, our results indicate that voters are unresponsive to both the quantity and magnitude of credit claiming messages.

Keywords: Economic development incentives; gubernatorial elections; strategic resource allocation (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:49:y:2021:i:5:p:673-716

DOI: 10.1177/10911421211050940

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