In 2011 Gov. Rick Snyder signed into law an economic incentive program known as the Michigan Business Development Program. The MBDP offers grants and other financial assistance to a small number of companies that make investments, create jobs or do some combination of both in the Great Lake State.
From March 2012 through September 2016 the program approved some 319 deals with a subsidy value exceeding $300 million, according to the authors’ count. Of that amount, $157 million had been disbursed to companies.
This study reports the results of a statistical model designed to isolate the impact that MBDP projects may have in the counties in which they are located. It relies on publicly available data from the Census Bureau and data from the state agencies that operate the MBDP. It finds the MBDP program to be ineffective: For every $500,000 disbursed through the first 10 quarters of the program — or 2.5 years — there was a corresponding cumulative loss of about 600 jobs in a county.
The Mackinac Center for Public Policy is a nonprofit research and educational institute that advances the principles of free markets and limited government. Through our research and education programs, we challenge government overreach and advocate for a free-market approach to public policy that frees people to realize their potential and dreams.
Please consider contributing to our work to advance a freer and more prosperous state.