Abstract
In the last decade, most states have targeted certain depressed areas for revitalization by providing a combination of labor and capital tax incentives to firms operating in an enterprise (EZ). Britain is also completing a federal program that designated zones for a ten-year period. These zone experiments can add to our understanding of the influence of tax policy on business investment, and provide insights into the design and implementation of federal programs with similar objectives. This paper summarizes the theory and empirical evidence on the operational success of these EZ programs. The experience and appraisal of EZs are the subject of this paper. The next section outlines a conceptual framework for analyzing the effects of an EZ program inside and outside zone boundaries. I present estimates of the percentage change in zone wages under several incentive scenarios. In section II, I discuss some methodological issues involved in measuring the success of an EZ program. The British EZ experime...
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