PUERTO RICO: INSIGHTS INTO ECONOMIC DEVELOPMENT POLICY Volume I (The Imperative to Settle the Status Question)

Glenn Jenkins ()

No 2016-11, Development Discussion Papers from JDI Executive Programs

Abstract: Insights into economic development are indeed revealed. Puerto Rico shows clearly that economic development is a political process. This volume contains five submissions to the Bipartisan Congressional Task Force on Economic Growth in Puerto Rico. Two emphatically argue the imperative to settle the status question of Puerto Rico. It further includes previous research works by Fernando LeFort titled “Is Puerto Rico Converging to the United States?”, J. Tomas Hexner, et. al “Statehood: A Pre-Condition to Economic Growth”, and “Puerto Rico and Section 936: A Costly Dependence” by J. Tomas Hexner and Glenn Jenkins. The main reason for Puerto Rico’s quite unrecognized slow development and its present financial and economic crisis was the non-resolution of its political status. Puerto Rico diverged rather than converged with the 50 states, and after consideration of the conventional variables, it’s not being a state appeared to be the main reason. Two immediate actions are required. First, significant public investment must begin immediately. Second, a level playing field from Washington: Puerto Rico should be treated like any state for all programs (for example, the earned income tax credit). Also Puerto Rico should be included in the enterprise zone legislation. Further, subsidized tax incentives, which are, in essence, corporate welfare, cannot be a prime building block for economic development. The economy needs to be reviewed for missed opportunities such as tourism, and attention should be focused on these developments. Finally, investors need reliable data for their decisions, and that has been sorely lacking.

Keywords: Puerto Rico; Section 936; PROMESA; VAT (search for similar items in EconPapers)
JEL-codes: O1 O2 (search for similar items in EconPapers)
Pages: 149 pages
Date: 2016-11
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