Thursday, September 02, 2010

New Orleans, A Case in Government Development Failure

I posted a while back on why creating a business friendly environment is better than government trying to persuade specific companies with financial incentives. Post-Katrina New Orleans was promised 14.9 billion federal money to redevelop the city. Here's what has happened:
But five years after Congress passed the Gulf Opportunity Zone Act of 2005, more of the tax-free benefits have gone to the state’s powerful oil industry than to development in hard-hit areas. New Orleans has so far received a total of $55 million in bonds shared between eight projects—or less than 1 percent of the more than $5.9 billion issued statewide. None of the bonds issued for New Orleans projects went to development in hard-hit and still-struggling areas like the Lower Ninth Ward.
Whether you are an individual or group, getting government resources is complex and time consuming. So often only the well connected or large companies can gain access. The article linked suggests organizing the money better, but I'm skeptical of asking the same group to do the same job over again would have different results.

This article was brought to my attention by a friend. Always feel free to send any interesting links my way.

2 comments:

  1. It is quite a leap to conclude that because Government resources were used poorly, therefore we would be better off if no resources were given.

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  2. I definitely didn't mean there should be no resources given. I'm just suggesting that we should always expect them to be misused. My hope is that this will create more accountability, or at least less resources given by a government so far away.

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You are the reason why I do not write privately. I would love to hear your thoughts, whether you agree or not.