Essays on the economics of development strategies

Policies implemented to encourage economic development must consider how the strategic behavior of actors like firms, individuals and various levels of government might affect outcomes. The first chapter of this dissertation examines why and how local governments compete for new business. We report the results of a unique field experiment in which we observe two foreign firms applying for property tax breaks from over 300 local governments. Because these two firms are in different industries and generate different amounts of investment and employment, governments' bids for these plants allow us to infer the value of different types of economic activity to different places. The findings suggest that governments engage in local industrial policy, offering generous tax breaks for the creation of jobs in preferred industries.; The second chapter investigates the question of whether the benefits of a particular economic development strategy outweigh its costs. We examine the case of special economic zones (SEZs) in the Philippines, constructing a dataset using previously unpublished firm-level operating and financial data from companies located in various SEZs around the country. Overall results suggest that many industries within SEZs generate net benefits for the country as a whole. However, we also find evidence that a few very efficient firms may be making up for the performance of inefficient firms within specific industries and SEZs. Combining marginal analysis with estimates of overall costs and benefits is critical in evaluating whether policies like SEZ creation and operation maximize national income.; The third chapter considers the possibility that unintended negative outcomes may result from a place's efforts to promote economic development within its jurisdiction. The creation of Business Improvement Districts (BIDs) in Philadelphia is perceived to have resulted in lower crime rates. However, when 1997-2002 crime incidence data geocoded to specific census tracts within the city of Philadelphia are examined, controlling for other factors using a difference-in-difference approach, we find evidence that benefits from crime deterrence within BIDs may have come at the cost of displacing mobile crime to areas that are not as well-organized.