Does Government Play Favorites? Evidence from Opportunity Zones
32 Pages Posted: 15 Oct 2019
Date Written: October 3, 2019
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: Suggested Citation