Competitive government

Columbus, Ohio and its suburbs are fighting over business relocations like coon dogs fighting over a possum. Businesses are receiving location subsidies for moves of just a few miles. Community officials say they should find a way to cooperate, but it's a classic prisoners dilemma. There's such a strong incentive to defect.

Theoretically, the state could stop the competition. But when it helps subsidize some of the moves, that seems unlikely.

Posted by Chip on October 04, 2004 at 06:17 AM
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Chip:
I read this with particular interest because Columbus is my hometown. The city and its suburbs have a long-standing history of competitiveness. In the 1950s and 1960s, the administration of Mayor M. E. (Jack) Sensenbrenner pursued an aggressive policy of annexation. Sensenbrenner had observed the beginnings of white flight in other cities in post-World War Two America and in essence, encircled outlying communities and townships. This insured the strength of the central city's tax and population bases for some time, although those advantages are beginning to fade. At one point, I believe, Columbus was geographically one of the largest cities in America. Perhaps the city would have been well-advised to have adopted the unigov model of Indianapolis.

But more to the point, tax abatements are a long-term losing proposition, don't you think?

Posted by: Mark at October 5, 2004 12:14 AM

"But more to the point, tax abatements are a long-term losing proposition, don't you think?"

They certainly are in the sense that if cities and states would all stop offering them they would have more tax revenue and the pattern of investment probably wouldn't be much different.

But they won't all stop. I wrote a little about this issue here.

Posted by: Chip at October 5, 2004 03:28 AM

I mean here:

http://www.chiptaylor.net/misc/2004/05/economic_development_tax_incentives.html

Posted by: Chip at October 5, 2004 03:29 AM