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Proof that Industrial Incentives are Poor Bet

[imgbelt img=DellNCplant.jpg]North Carolina stayed out of the incentive game for decades. The state paid millions to Dell Computer to open a manufacturing plant near Winston-Salem. Now the plant is closed.

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In fairness, it must be said that the General Assembly has been willing to examine and change the incentives structure. In the past two years, legislators appropriated money for a major study of this subject by our Carolina Center for Competitive Economies in the Kenan Institute for Private Enterprise. There have been efforts to target the incentives to the areas of greatest needs and to make them “earned” by the companies instead of all granted up front.

However, the evidence is that these incentives do not redound to the benefit of distressed rural areas as intended. Dell, for example, was located in Winston-Salem.

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