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In evaluating incentives, everything depends on the details: how much in incentives it takes to truly cause a firm to locate or expand, the multiplier effects, the effects of jobs on employment rates, how jobs affect tax revenue versus public spending needs. Do benefits of incentives exceed costs? This depends on the details. This book is about those details. What magnitudes of incentive effects are plausible? How do benefits and costs vary with incentive designs? What advice can be given to evaluators? What is an ideal incentive policy? Answering these questions about incentives depends on a model of incentive effects, which this book provides.


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  1. Why Incentives Are Tempting but Problematic
  2. A Description of Business Incentives
  3. Multipliers and Leakages: How to Think About Incentives
  4. Improving Incentives: What Can Policymakers Do?
  5. Are My State’s Incentives Working? Practical Evaluation Strategies for Incentive Programs
  6. An Ideal State Incentive Program, Taking Account of Economic and Political Realities
  7. The National Interest: What Should the Federal Government Do about State and Local Incentives?
  8. A Practical Path Forward

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The Pew Charitable Trusts


9780880996686 (pbk.) ; 9780880996693 (ebook)

Subject Areas

ECONOMIC DEVELOPMENT; Regional policy and planning; Business and tax incentives

Making Sense of Incentives: Taming Business Incentives to Promote Prosperity




Bartik, Timothy J. 2019. Making Sense of Incentives: Taming Business Incentives to Promote Prosperity. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research. https://doi.org/10.17848/9780880996693

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This work is licensed under a Creative Commons Attribution-NonCommercial-Share Alike 4.0 International License.