Who Benefits From Minority Business Set-Asides? The Case of New Jersey
Journal of Policy Analysis and Management, Vol. 15, No. 2, 202-226 (1996)
26 Pages Posted: 11 Dec 2013
Date Written: December 6, 2013
Race-based remedies often are justified by evidence of prior discrimination. They work when they benefit groups previously disadvantaged. This article examines one such remedy-minority business set-asides-and its application in the award of public procurement and construction contracts by the state of New Jersey. Analyzed are contract awards to minority and non-minority/non-women-owned business enterprises in 1990, as well as in periods before, during, and after the imposition of a state minority set-aside program. Using a conventional decomposition approach, the article reveals significant discriminatory gaps in the success of minority- versus non-minority-owned firms in obtaining contracts from the state of NewJersey. The analysis suggests that minority contracting success rates fell from the pre-set-aside era to the set-aside era and that discriminatory outcomes persisted. The particular remedy chosen - while justified based on evidence of prior discrimination - appears not to have reduced the original discrimination nor did it unambiguously benefit minority businesses.
Keywords: minority business, New Jersey, discrimination, benefits, minority, non-minority
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