Some clarifications, further thoughts, and a question
This is a follow-up to a previous post on Governor LePage’s ideas for incentivizing localities to adopt his preferred regulatory regime.
1. There is nothing unusual about state governments promoting certain areas for business development. Typically, they pick particular areas to promote because of the needs of the area and/or particular resources in the area.
2. The state government has every right to promote areas based on whatever legal criteria it desires.
3. As this policy idea is clearly a step away from Govenor LePage’s initial idea of taking funding from some localities, it shows that he and his administration were responsive to reactions to the earlier idea. True, there were problems with the idea insofar as many local policies are under a local span of authority, but the shift shows learning and responsiveness.
4. With the initial idea a political nonstarter, it remains to be seen if there will be push-back to this idea from localities and the groups that represent them. Another political dynamic involves Democrats likely characterizing this as a race to the bottom.
5. I’d be curious to know which localities have more stringent regulations and, more broadly, the statistical relationship between regulatory regimes and economic development. This matters politically, in that it could affect how different localities respond to the administration’s proposal, but it also goes to the argument that local regulation limits economic growth. Does anyone know of a credible empirical study of Maine localities assessing this hypothesized relationship?
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