The Texas Economic Development Act (EDA) created a state tax incentive program that allows large businesses to limit public school district property taxes through agreements with local school districts. It was developed in response to relatively high property tax burdens and aggressive economic development incentives in other states. However, the EDA is set to expire on December 30, 2022. This raises key questions: Should it be extended? What other policies could be enacted to take its place?
At this event, Nathan Jensen, a professor in the Department of Government at the University of Texas-Austin, discussed his book, “Incentives to Pander: How Politicians Use Corporate Welfare for Political Gain” (Cambridge University Press 2018), co-authored by Edmund Malesky. In the book, Jensen and Malesky show that economic development incentives for specific companies are generally inefficient, economically costly and distortionary. Through survey data spanning several countries, they provide evidence of economic incentives being used for political gain, with dire results — less economic growth, greater economic inequality, higher taxes and less spending on public education. This book provides valuable lessons for Texas as policymakers determine whether extending or enacting economic development incentives is the right way forward.
This event was part of the Baker Institute Center for Public Finance’s Book Forum. Follow @BakerInstitute on Twitter and join the conversation online with #CPFBookForum.
Agenda
6:00 pm — Reception
6:30 pm — Presentation
Registration
Registration has closed.
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Featured Speaker
Nathan Jensen, Ph.D., is a professor in the Department of Government at the University of Texas-Austin. He was previously an associate professor in the Department of International Business at George Washington University and an associate professor in the Political Science Department at Washington University in St. Louis. He teaches courses and conducts research on government economic development strategies; firm non-market strategies and business-government relations; the politics of oil and natural resources; political risk in emerging markets; trade policy and international institutions. He earned a Ph.D. from Yale University in 2002.
