Welcome to Jobs Inc., Where States Have Little Say in Economic Development

Source: Alan Greenblat, Governing, November 2015

Putting the chamber of commerce or other private groups in charge of economic development has long been common at the local level and has been tried in some states, but just over the past few years it has gained popularity in states with Republican administrations, including Arizona, Indiana, Iowa and Wisconsin. Illinois and Oklahoma are also considering a similar move. …Of course, commerce departments and other public agencies have been guilty of incompetence and malfeasance as well. Perhaps the most notorious example in recent years involves 38 Studios, a video game company founded by former Boston Red Sox star Curt Schilling, which went bust after receiving a $75 million loan from the state of Rhode Island. … At the same time, purely public agencies continue to be responsible for some of the biggest scores in development, including Nevada’s billion-dollar deal with Tesla last year to build a ginormous battery factory outside Reno. This points to what may be the fundamental problem with the whole privatization push: There’s no proof that this approach works any better — or really all that much differently — than old-fashioned development agencies.