MPR: The Economic War Among the States

The Economic War Among the States: An Introduction
Presented by Minnesota Public Radio's Civic Journalism Initiative
May, 1996

PUBLIC RADIO BROADCASTS

CONFERENCE: MAY 21- 22

CASE STUDY

LETTERS

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[The Constitution] was framed upon the theory that the peoples of the several states must sink or swim together, and that in the long run prosperity and salvation are in union and not division. --Justice Benjamin Cardozo, U.S. Supreme Court, 1934

From this introduction you may wish to:

Explore the case study prepared by Harvard University's Kennedy School,

Email thoughts and ideas, including referrals to additional online source material, to econwar@mpr.org, or

Go to the symposium home page for a project overview.

The Economic War Among the States is produced by Minnesota Public Radio's Civic Journalism Initiative and is made possible by a major grant from the Ford Foundation.

MANY STATES ARE OFFERING tax incentives, training subsidies, land and even cash payments to attract businesses and jobs from other states. Proponents say it is an investment that builds a state's economic base. Critics contend businesses play states against one another in costly "bidding wars" to obtain the most favorable deals. Do the millions spent in such incentives represent money well-spent? Does it create lasting, worthwhile jobs? Is it fair to other businesses? Does it take public funding away from other projects?

These essays, offered in advance of the conference, provide an introduction to the subject. They include:

Overview

The economic war among the states
Chris Farrell
Economics Editor, Business Week
Commentator, Sound Money

Economic and policy issues

Congress should end the economic war
for sports and other businesses
Melvin L. Burstein
Executive Vice President and General Counsel
and Arthur J. Rolnick
Senior Vice President and Director of Research
Federal Reserve Bank of Minneapolis

Doing battle over the incentives war:
Improve accountability but avoid
federal noncompete mandates
Graham S. Toft
President
Indiana Economic Development Council Inc.
Indianapolis, Indiana

The problem with state bidding wars
and some possible remedies
Gerald W. McEntee
President
American Federation of State, County and Municipal Employees
Washington, D.C.

Eight issues for policy toward
economic development incentives
Timothy J. Bartik
Senior Economist
W.E. Upjohn Institute for Employment Research
Kalamazoo, Michigan

Business climate and the role
of development incentives
Brian Dabson, President
Carl Rist, Policy Analyst
and William Schweke, Senior Fellow
Corporation for Enterprise Development
Washington, D.C.

On the efficiency effects
of tax competition for firms
By Joe Mattey, Senior Economist
and Mark Spiegel, Senior Economist
Federal Reserve Bank of San Francisco

Taxes, incentives and competition
for investment
Peter S. Fisher, Associate Professor
and Alan H. Peters, Assistant Professor
Graduate Program in Urban and Regional Planning
University of Iowa, Iowa City, Iowa

Industrial Development in Retrospect
Graham S. Toft
President
Indiana Economic Development Council Inc.
Indianapolis, Indiana

Congress Should End the Economic War Among the States
Melvin L. Burstein
Executive Vice President and General Counsel
and Arthur J. Rolnick
Senior Vice President and Director of Research
Federal Reserve Bank of Minneapolis

Legal Issues

The congressional process and the
constitutionality of federal legislation
to end the economic war among the states
Philip P. Frickey
Faegre & Benson Professor of Law
University of Minnesota
Minneapolis, Minnesota

Commerce clause restraints
on state tax incentives
Walter Hellerstein
Professor of Law
University of Georgia
Athens, Georgia

The power of Congress to regulate
interstate economic competition
Larry Kramer
Professor of Law
New York University Law School
New York, New York

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