This article explores an interesting question. Why, despite compelling evidence arguing against their effectiveness, do ever-larger incentive packages continue to be offered by the states to attract firms? Copyright 2002 by The Policy Studies Organization.

While there has been a turn away from positive government intervention in the economy at the national level, we have witnessed an embrace of this strategy in may of the American states. What impact, if any, have these efforts by state governments had on their economies? The paper focuses on...