The Political Economy of Trophy Industrial Recruitment Projects

Why do states persist in offering large financial incentives to firms to induce them to invest in the state, a practice commonly derided as “smoke-stack chasing”? The conventional wisdom is that while incentives may be a poor long term economic development strategy, they are a good political strategy for governors seeking to improve economic conditions and political support in the short term. Using the annual list of top economic development deals compiled by Site Selection magazine, I examine the political impact of these “trophy” industrial recruitment projects on county level election returns in gubernatorial elections from 1989-2004. The results demonstrate that trophy hunting is an excellent short term political strategy that dramatically increases the number of votes a governor receives in the subsequent election. Acknowledgements: Funding for this research was provided by a Summer Collaborative Research Grant from Skidmore College and the APSA Small Research Grant Program. Research assistance was provided by Petria Fleming and Ben Kaufman.