Date:
Location:
Speaker
Brian Highsmith, "Regulating Location Incentives"
Abstract
In recent years, a growing share of state and local budgetary resources has been diverted to a small number of firms through multi-billion-dollar location incentive megadeals, as represented by Amazon’s HQ2 search and Wisconsin’s Foxconn boondoggle. Structurally powerful companies have become adept at devising new mechanisms for extracting the public resources of local communities to secure a competition advantage over market rivals. But legal scholarship has not considered the possibility that firms’ incentive demands might implicate the federal protections enacted to protect against unfair methods of competition and corporate dominance more broadly. This Article develops a historical and institutional case for using latent authority under the Federal Trade Commission Act to supervise location incentive competition—and regulate practices that present legally cognizable harms.
This Article uses location incentive megadeals as a case study exploring how federal regulation, applying an antimonopoly framework, could address a classic concern of state and local policy: unchecked corporate dominance over local communities. I first demonstrate that the populist movement responsible for the enactment of our early antimonopoly protections was substantially motivated by broad opposition to the lavish state and local subsidies demanded by private railroad companies during the late 19th century. When Congress later strengthened those protections by creating the FTC in 1914, federal legislators were attempting to address harms created by unregulated interjurisdictional competition for taxable corporate activity. Reviewing recent empirical literature and public reporting, I next show that contemporary incentive megadeals present harms directly analogous to those of concern to past legislative drafters: to healthy product market competition, to consumers of private and public goods, to labor market structure, and to processes of democratic self-governance. Finally, I argue that an antimonopoly-informed regulatory approach offers various institutional advantages as compared to previous (unsuccessful) attempts to rein in this source of public resource misallocation—namely by accommodating important policy considerations and overcoming the coordination challenges that have prevented states and local governments from acting on their own.
The American Politics Research Workshop (Gov 3004) meets all academic year, Tuesdays, 12:00 - 2:00 PM, in CGIS K354. This workshop presents an opportunity for graduate students and Harvard faculty to present and receive feedback on their current research. The workshop highlights key theoretical and empirical findings from Harvard affiliates on topics related to American politics.
All interested Harvard affiliates are invited to attend.