Captured Development: Industry Influence and State Economic Development Subsidies in the Great Recession Era

Joshua M. Jansa, Virginia Gray

Research output: Contribution to journalArticle

  • 3 Citations

Abstract

Scholars focus on interstate competition and intrastate economic conditions as the primary determinants of state economic development policies, including direct subsidies. New data from the Good Jobs First Subsidy Tracker illustrates large differences in subsidy spending across the states and that established firms are the disproportionate beneficiaries. In light of this new evidence, we argue that the political presence of the business sector within the state is an important determinant of state subsidy spending. A large political presence helps forward industry interests before government and has the potential to capture state governments. We find support for the cultural capture model by demonstrating that a greater number of lobbyists and campaign contributions from businesses leads to more subsidy spending, all else equal. We conclude that subsidies, and which companies receive them, are a product of both politics and economics.

LanguageEnglish (US)
Pages50-64
Number of pages15
JournalEconomic Development Quarterly
Volume31
Issue number1
DOIs
StatePublished - Jan 1 2017

Fingerprint

recession
subsidy
economic development
industry
economics
determinants
economic conditions
development policy
Industry
Economic development
Subsidies
Great Recession
politics
campaign
firm
evidence

Keywords

  • campaign contributions
  • cultural capture
  • economic development
  • lobbying
  • subsidies

ASJC Scopus subject areas

  • Development
  • Economics and Econometrics
  • Urban Studies

Cite this

Captured Development : Industry Influence and State Economic Development Subsidies in the Great Recession Era. / Jansa, Joshua M.; Gray, Virginia.

In: Economic Development Quarterly, Vol. 31, No. 1, 01.01.2017, p. 50-64.

Research output: Contribution to journalArticle

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