Economic Development Incentive Wars What influence do State and Local Economic Development incentives have on the location decisions of firms?

State and local policymakers throughout the country experience tremendous pressure from their constituents to create policy tools that spur job growth and reduce unemployment in their jurisdictions. One tool that has been viewed by policymakers as useful in stimulating job growth and reducing unemployment has been economic development incentives. Despite this view, there has been growing concern over the cost effectiveness of these incentives. This paper provides a comprehensive discussion of the issues surrounding economic development incentives and evidence from four different methods of study as to the influence incentives have had on employment growth in states and counties throughout the United States.