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Pandering Politicians? Targeted Economic Development Incentives and Voter Response

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  • Jacob Bundrick
  • Erica Smith
  • Weici Yuan

Abstract

Empirical evidence largely suggests that the billions of dollars state and local governments spend on targeted economic development incentive (EDI) programs are typically ineffective at stimulating broad economic activity. The continued use of EDIs by public officials has thus led scholars to investigate the role of these programs in political pandering. In this paper, we explore the relationship between EDIs and gubernatorial elections in Arkansas. Specifically, we investigate whether officials strategically allocate discretionary EDIs based on previous county-level gubernatorial election outcomes. We subsequently explore the impact of discretionary EDIs on an incumbent party’s bid for gubernatorial reelection at the county level. Our results largely suggest that public officials do not allocate EDIs based on previous election outcomes. Moreover, our results indicate that voters are unresponsive to both the quantity and magnitude of credit claiming messages.

Suggested Citation

  • Jacob Bundrick & Erica Smith & Weici Yuan, 2021. "Pandering Politicians? Targeted Economic Development Incentives and Voter Response," Public Finance Review, , vol. 49(5), pages 673-716, September.
    • Handle: RePEc:sae:pubfin:v:49:y:2021:i:5:p:673-716
    DOI: 10.1177/10911421211050940
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    References listed on IDEAS

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    1. Jacob Bundrick & Thomas Snyder, 2018. "Do Business Subsidies Lead to Increased Economic Activity? Evidence from Arkansas's Quick Action Closing Fund," The Review of Regional Studies, Southern Regional Science Association, vol. 48(1), pages 29-53, Spring.
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