Favoritism and Cronyism Flourish in Mississippi

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When a new megadeal with a corporation moving to Mississippi is announced, politicians hold a news conference, cut a cake, boast about the number of jobs created and toss some dirt with gold shovels.

by Steve Wilson – Watchdog.org |  June 03, 2014 | TheDailySignal.com

When a new megadeal with a corporation moving to Mississippi is announced, politicians hold a news conference, cut a cake, boast about the number of jobs created and toss some dirt with gold shovels.

But recently published research by Christopher Coyne and Lotta Moberg of the Mercatus Center at George Mason University casts major doubt on whether these taxpayer-funded targeted investments meet their goals of economic revitalization and job creation.

One of the costlier examples cited is Michigan, where the study found the cost of the Economic Growth Authority Tax Credit Program was $45,000 per job. The worst offender was Louisiana, whose $1.7 billion in incentives to Cheniere Energy to create 255 jobs and retaining another 77 added up to $7.5 million per job.

Coyne said one of the things that surprised him in the course of his research was how little the true costs to taxpayers and the political system were discussed.

“Most treatments of the issue overlook the various costs associated with these types of policies,” Coyne said. “Specifically, that it incentivizes lobbying and cronyism so that companies can receive these benefits. Part of this is a rhetorical issue in that the term ‘targeted benefits’ implies a net benefit to citizens. Our study highlights that net benefits cannot be assumed and often never emerge.”

by Steve Wilson |  June 03, 2014 | Watchdog.org

Steve Wilson is a reporter for Watchdog.org, a national network of investigative reporters covering waste, fraud and abuse in government. Watchdog.org is a project of the nonprofit Franklin Center for Government & Public Integrity.

To read more: http://dailysignal.com/2014/06/03/favoritism-cronyism-flourish-mississippi/

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