When it comes to giving out business incentives, you won’t find North Carolina at the top of the list. Don’t worry — that’s actually good news.
Incentives can be targeted tax breaks, loans, marketing subsidies, or direct grants. Politicians use them to try to get companies either to relocate or expand within their jurisdictions. Businesses accept them, naturally, and in a few cases incentives may even be decisive.
But, generally, economic incentives are a failed policy, based on the fundamentally flawed premise that politicians are capable of predicting which companies or industries are worth investing in.
Although it may get me thrown out of the cynical-columnist club to say this, politicians aren’t fools. Incentives don’t fail because most lawmakers or bureaucrats are dumb, or suckers, or corrupt. It’s just impossible for central planners to possess enough information, in real time, to make sensible investment decisions with taxpayer money.