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Rafia Mijiyawa
mijiyawa.rafia@bls.gov
Rafia Mijiyawa is an economist in the Office of
Employment and Unemployment Statistics, U.S.
Bureau of Labor Statistics.
Better business incentives for better prosperity
Making Sense of Incentives: Taming Business Incentives to
Promote Prosperity. By Timothy J. Bartik. Kalamazoo, MI:
W. E. Upjohn Institute for Employment Research, 2019, 181
pp., $14.99 paperback.
Are you a legislative representative who wonders how to
create jobs in your district? Are you a local resident or a
social development expert who seeks to understand the
benefits and costs of business incentives in a region? If the
answer to any of these questions is yes, you may want to
read Timothy J. Bartik’s new book, Making Sense of
Incentives: Taming Business Incentives to Promote
Prosperity. The book, divided into seven chapters, uses an
economic model and empirical data to examine the costs
and benefits of incentives, identifies best practices for
evaluating the effects of incentives, and offers
recommendations on how state, local, and federal
policymakers can reform incentives to foster prosperity.
The author defines incentives as business assistance
programs that provide companies with benefits such tax
breaks, cash grants, free land, and free job training. These
programs, offered by local governments, aim to encourage
businesses to locate or expand in a local area and boost
growth. The first U.S. incentive program, launched in
Mississippi in 1936, was the state’s “Balance Agriculture
with Industry” program. This program provided for low-cost
land and no property taxes, aiming to develop the local
agricultural industry and promote job growth. Since 1990,
incentives provided to firms have tripled, reaching an
annual level of $50 billion nationwide. In 2017, the state of
Wisconsin provided more than $3 billion to electronics
manufacturer Foxconn, which agreed to build a new
manufacturing plant for flat screen panels. Between 2017
and 2018, numerous states offered over $7 bil