When will the state of North Carolina pay a business to move its operations here or expand its current operations here? As the NC Department of Commerce states it, "the ... Fund helps recruit and expand quality jobs in high value-added, knowledge-driven industries.  It also provides financial assistance to those businesses or industries deemed vital to a healthy economy that are making significant efforts to expand in North Carolina."

North Carolina is not alone in offering financial incentives to firms considering relocation or expansion -- most states (and foreign countries) do so. Some citizens are not happy to see state revenues spent on "foreign" corporations: their point can be summarized "It is not worthwhile to the citizens of North Carolina to spend our scarce resources this way". The state officials respond "If we structure this correctly, the incentives cost us nothing."

Can both sides be right?

• One North Carolina Fund: NC Department of Commerce
• CFED Testifies to NC Panel on Shortcomings of Economic Incentives: Bill Schweke
• Getting Our Money's Worth? : Mejia, Nordstrom and Schweke, 2007
• Forsyth County Dell Plant Feeling the Pinch: Richard Barron, 12 March 2009
• NC Commerce Chief: Dell Incentives Yet to Pay Off: Dale Gibson

1. What is the economic logic of business incentives? Can it be in the interests of the citizens of North Carolina to provide incentives to firms to relocate or expand here? Explain why or why not.
2. What does the state of North Carolina do to encourage these relocations to (or expansions in) counties in greatest need of employment?
3. What are the main criticisms of this use of state resources? Do you agree or disagree with these criticisms?
4. What is your evaluation of the state's decision to provide incentives to Dell to establish a plant in Forsyth County?

1. Surry County currently has one of the highest unemployment rates in the state. How can the state use its available incentives programs creatively to lure a large manufacturer to set up operations in Mount Airy?
2. Spirit Aerosystems and Sanderson Foods are two large corporations currently relocating operations to Lenoir County. What role did business incentives play in those decisions? What other factors entered the relocation decisions?
3. Should the state of North Carolina offer business incentives to firms wishing to relocate to Mecklenburg County? Why or why not? If so, what type of incentives would you recommend? If not, is it better to "lose" the jobs to another state?