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December 1988, No. 16

States compete for business. The stakes are high and the game is rough. Among the bargaining chips that states can use, selective tax incentives and fiscal inducements are favorites.

Last Updated: 12/29/1988

Bidding for Business

David Allardice , William Testa

Competition among local and state governments can sometimes result in a bidding frenzy. For example, 25 states (and an untold number of localities) offered generous packages of tax abatements, special services, and improvements to infrastructure in an attempt to land General Motors' Saturn auto facility. State governors made personal visits to GM headquarters and appeared on national television to plead their cases in public.

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