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Targeted Incentives

Academic Research

“Do Targeted Business Subsidies Improve Income and Reduce Poverty? A Synthetic Control Approach” by Jacob Bundrick and Weici Yuan

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This paper by Bundrick and Yuan, published in Economic Development Quarterly on September 20, 2019, used evidence from Arkansas’s Quick Action Closing Fund to analyze how effective deal-closing funds are at increasing incomes and decreasing poverty. Their results largely suggest that the business subsidy program fails to increase incomes and lower poverty rates over the long term at the county level.

“Do Business Subsidies Lead to Increased Economic Activity? Evidence from Arkansas’s Quick Action Closing Fund” by Thomas Snyder and Jacob Bundrick

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This study investigates the relationship between, on the one hand, the provision of cash subsidies to select businesses and, on the other hand, employment and establishments in Arkansas’s counties. The authors find no evidence to suggest that Quick Action Closing Fund subsidies lead to increased employment and more business establishments in Arkansas’s counties. This working paper was published by the Mercatus Center at George Mason University and the Review of Regional Studies.

Policy Reviews

“Government Accountability: 5 Fixes for Arkansas’s Quick Action Closing Fund” by Jacob Bundrick

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The Quick Action Closing Fund is a targeted economic development incentive program Arkansas uses to try to increase economic activity. This program allows the state government to give cash grants in order to attract or retain businesses. It’s largely up to the governor of Arkansas to approve these cash grants. Arkansas lawmakers can take steps to improve the transparency and accountability of the program. This policy review written looks at five different policy proposals that could accomplish these goals.

“Tax Breaks & Subsides: Challenging the Arkansas Status Quo” by Jacob Bundrick

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Have you ever wondered whether tax breaks and subsidies have side effects? Are you curious about alternative ways to expand Arkansas’s economy? This policy review provides an in-depth look at these programs, their economic impact, and some common misconceptions people have about them.

Policy Briefs

“Economic Development or Risky Business: A Citizen’s Guide to Issue 3, 2016” by Jeremy Horpedahl and Jacob Bundrick

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This brief guide gives readers the pros and cons of the controversial ballot measure “Issue 3: An Amendment to the Arkansas Constitution Concerning Job Creation, Job Expansion and Economic Development.” This ballot issue would remove the current cap on Amendment 82 bonds that the state may issue for economic development projects and would allow local governments to appropriate money for economic development. Proponents of Issue 3 argue that, by removing the limit on the amount of debt the state can issue for economic development, Arkansas may be able to attract economic development projects it would not otherwise be able to secure. However, issuing debt and using tax dollars for economic development comes at a cost. Arkansas and its cities would take on significant risk by issuing public debt to attract select companies under the change from Issue 3.

Op-Eds and Commentary

You can find more of our targeted incentives-related commentary at The ACRE Review.