Why do you think so many City governments and state seem to bend over backwards to get new businesses to locate and their local economies? Indeed, many cities, countries and states offer tax breaks (e.g. promises to not impose local property taxes for up to 15 years), and some provide land free to businesses who choose to locate in their areas.  What concepts could explain this behavior?

Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter11: Price-searcher Markets With High Entry Barriers
Section: Chapter Questions
Problem 11CQ
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Why do you think so many City governments and state seem to bend over backwards to get new businesses to locate and their local economies? Indeed, many cities, countries and states offer tax breaks (e.g. promises to not impose local property taxes for up to 15 years), and some provide land free to businesses who choose to locate in their areas.  What concepts could explain this behavior?

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