State Regulatory Spending: Boon or Brake for New Enterprise Creation and Income?
Economic Development Quarterly, Vol. 24, No. 3, 2010
Posted: 14 Apr 2010 Last revised: 13 May 2010
Date Written: April 14, 2010
This article addresses a public policy question: Does state government regulation foster or deter economic development? The authors estimate a system of simultaneous equations for income growth, regulation growth, and growth in the number of new enterprises. It is found that regulation does not provide efficient solutions to conflicts and, therefore, does not foster economic development. It is also found that new enterprise formation does not necessarily indicate income growth and economic development.
Keywords: entrepreneurship, state and local economic development policy, public finance
JEL Classification: G38
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