Modelling the Provision of Industrial Development Incentives

  • Paul Peretz
Part of the Policy Studies Organization Series book series (PSOS)


In recent years there has been a remarkable expansion in the number of industrial development incentives offered by American states. The number of states offering seven or more of the ten incentives most valued by firms increased from three in 1966 to thirty-six in 1983 (Peretz, 1986). This expansion has occured despite a general consensus among analysts that such incentives have only marginal effects on firms’ decisions and that they serve primarily as a general subsidy to industry. In this chapter, such subsidy decisions will be examined in order to show both why states offer industrial location incentives and why they are generally contrary to the public interest.


Positive Externality Industrial Location Social Externality Federal Subsidy Social Overhead Capital 
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© Policy Studies Organization 1988

Authors and Affiliations

  • Paul Peretz

There are no affiliations available

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