While entrepreneurs benefit from unrestricted free entry into markets, they have a time-inconsistent incentive to lobby for government entry restrictions once they become successful. Bad political institutions yield to these demands, and growing barriers are placed on domestic and international...

There is a large literature examining the macroeconomic effects of state economic development incentives on employment, income, tax revenue, and economic growth. At best, these incentives are found to be weakly effective at job creation, but inefficient due to the distortions, secondary effects,...