The focus has tended to be on retaining and modernizing businesses in a particular area or on encouraging successful entrepreneurial initiative. The challenge is to turn these programs into effective delivery systems. These must include public and private providers and address the pressing need for businesses to modernize and to upgrade their technologies so that they can be more competitive. Thus, business attraction should not be seen as a worthless exercise. Rather, the challenge for state and local governments is to find a better way to respond to this dilemma and to act with greater fiscal integrity.
Some states even disclose how much an individual company benefits from the incentives.
Rigorous and standardized approaches for calculating the costs of each job created or retained. Accurate tax expenditure reporting if tax-based incentives are used. They must create significant numbers of jobs cost-effectively and fit with the state s highest development priorities. Policy-makers should set clear goals and criteria for what sorts of projects deserve financing. Since not all incentives are the same, policy-makers must give special attention to allocating scarce resources to the types of incentives that have the greatest potential accountability and that are likely to provide the broadest benefits beyond the company assisted.