Does Government Play Favorites? Evidence from Opportunity Zones

32 Pages Posted: 15 Oct 2019

See all articles by Ofer Eldar

Ofer Eldar

Duke University School of Law; Duke University - Fuqua School of Business; Duke Innovation & Entrepreneurship Initiative

Chelsea Garber

Duke University - Department of Economics

Date Written: October 3, 2019

Abstract

In 2017, Congress introduced the Opportunity Zone ("OZ'') designation to promote development in distressed communities. A widely criticized feature of the program is that state governors select qualifying zones from many eligible tracts without any meaningful scrutiny. We find that OZ designation is more likely for (1) tracts with higher unemployment rates and poverty levels and lower incomes, (2) tracts on an upward trajectory in terms of poverty and income, and (3) tracts in counties that supported the governor in the last election. Overall, while governors targeted selection to the relatively poor tracts, there is evidence of potential favoritism.

Keywords: Opportunity Zones, Development, Administrative Discretion, Social Entrepreneurship, Taxation, Subsidies

JEL Classification: O2, H1, O34

Suggested Citation

Eldar, Ofer and Garber, Chelsea, Does Government Play Favorites? Evidence from Opportunity Zones (October 3, 2019). Available at SSRN: https://ssrn.com/abstract=3463541 or http://dx.doi.org/10.2139/ssrn.3463541

Ofer Eldar (Contact Author)

Duke University School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States

Duke Innovation & Entrepreneurship Initiative ( email )

215 Morris St., Suite 300
Durham, NC 27701
United States

Chelsea Garber

Duke University - Department of Economics ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708-0204
United States

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