Terry F. Buss

The Effect of State Tax Incentives on Economic Growth and Firm Location Decisions: An Overview of the Literature

This article reviews the tax study literature to assess the state of knowledge about the relationship among taxes, related factors, and economic growth as well as the use of tax incentives to influence business locations. Although tax studies have become increasingly sophisticated, especially during the past decade, they have tended to yield conflicting results regarding whether taxes matter. Some studies focus on costs and benefits of tax incentives, but few look to see whether public monies could have been better spent or whether tax incentives were economically justified. Tax studies offer little guidance to policy makers concerned about fine-tuning tax rates or tax offerings and effectively employing tax incentives as economic development tools.

The Case Against Targeted Industry Strategies

Targeted industry studies and strategies have been widely used in economic development practice since the 1970s, and their use continues to grow. In spite of their longevity, targeting as a method never has been formally or rigorously evaluated. This article looks at dozens of studies and strategies and concludes that targeting is based on poor data, unsound social science methods, and faulty economic reasoning and is largely a political activity. Targeting studies could be improved somewhat by making their methods more transparent, encouraging use of competing studies, and building in a required evaluation component.

Cost-Benefit Analysis: A Normative Perspective

Policy makers rely on cost-benefit analysis (CBA) to help them select the best policies and projects to alleviate poverty. But CBA, as practiced in the United States, not only fails to inform policy makers about the best use of scarce resources but helps make poverty worse for many people. International donor organizations—the United Nations, Organization for Economic Cooperation and Development, and World Bank—have sophisticated CBA methods that could better serve policy makers in deciding how to help poor people. The authors look at the results of CBA in four economic development venues—enterprise zones, military base redevelopment, sports stadiums, and business incentives—for developing a critique of cost-benefit practices. A brief program is offered to correct cost-benefit practice, but it is concluded that reform must come not from policy makers and policy analysts who now use CBA but from outsiders who want to influence political systems on behalf of poor people.

To Target or Not to Target, That’s the Question: A Response to Wiewel and Finkle

The gist of the Wiewel (1999 [this issue])/Finkle (1999 [this issue]) criticisms of my article is that I am a free-market advocate and, by inference, a capitalist—and that this accounts for differences between our perspectives, theirs, of course, representing the “shining path.” There are worse things than being accused of advocating for less, much less, government intervention in economies. I take this as a compliment. But Wiewel and Finkle are wrong to cast this debate as a difference in ideology, grounded only in rhetoric. Circumstantial evidence casts considerable doubt on targeting’s efficacy, as shown in my point-by-point response below.

Health And Poverty Among Elderly Persons: A Community-Oriented Primary Care Survey

Providing health care for independent-living elderly persons is important, yet family physicians often lack accurate information about needs and access to care. The Community-Oriented Primary Care (COPC) approach and health status models from health services research provide a framework for assessing need and access to care. Personal interviews were conducted with 990 noninstitutionalized elderly persons in Youngstown, Ohio. Results showed that poverty, gender, and race were not strongly related to health status as measured by numbers of symptoms, functional status, or subjective health status. In addition, elderly persons had fewer health care needs and greater access to care than expected. Simple models of health status, need, and access do not seem to apply. The study shows the usefulness of COPC in planning health services; however, more effort is needed to refine measures of health status, need, and access.

Plant Closings: Impacts and Responses:

In this review essay, Terry F. Buss and F. Stevens Redburn dispute many of the reputed impacts of plant closings on workers and their families. They also find that the traditional publicly provided social service programs do not meet the needs of displaced workers. For example, they find that income maintenance programs such as AFDC play a minor role in aiding dislocated workers; that the public employment services play a minor role in helping displaced workers find jobs; that retraining plays a small role in the reemployment of displaced workers; and that mental health services are among the services least often used by displaced workers. Buss and Redburn call for a better targeting of public programs toward people with greater-than-average risk offailure: less-educated or less-experienced people, older workers, the unskilled, minorities, and the handicapped. They also advocate some new ways to meet the health insurance needs of many displaced workers.

BANK LOANS TO ENTREPRENEURS IN RURAL AMERICA

Numerous government programs channel capital into rural communities, assuming that new businesses face major capital shortages in starting up. More such programs are enacted annually. This paper looks at business start-ups in Idaho, Montana and Iowa to see the extent of market failure in rural America. Contrary to conventional wisdom, we found capital to be widely available for start-ups, suggesting that government programs are not warranted.

Assessing the Accuracy of BLS Local Unemployment Rates: A Case Study.

The accuracy of local unemployment rates published by the Bureau of Labor Statistics has been questioned because of their heavy reliance on secondary data sources. It has often been suggested that this criticism could be tested if the BLSs survey methodology for determining national rates were applied to local labor markets. This study employs that methodology more rigorously than previous studies to estimate unemployment in the Youngstown/Warren SMSA in June 1984. When the resulting estimates are compared with those obtained using the BLSs local survey methodology, it is found that the BLS estimates significantly understate unemployment. The author offers suggestions for improving BLS local-level statistical programs.

Motivation for Viewing Two Types of TV Programs

b The distinction between entertainment and public affairs programming on television has served many purposes beyond simple business organization.! Some argue that “responsible citizens” use the mass media, including television, to inform themselves concerning public affairs.2 Entertainment programming, in contrast, has been viewed in other contexts. Observers have suggested that what appears to be a generic distinction between viewers’ desires for entertainment and viewers’ desires for becoming informed about public affairs may be less certain.3 It

Youngstown/Warren, Ohio: A Reflection of the Boom and Bust of the Steel Industry

The Youngstown/Warren area is located in northeast Ohio midway between Cleveland and Pittsburgh. The metropolitan area of 531,350 people includes the cities of Youngstown (population 105,000) in Mahoning County and Warren (population 53,000) in Trumbull County.