Rhetoric versus Reality: A Review of Studies on State Enterprise Zone Programs

This paper provides a comprehensive review of empirical analyses of state-sponsored enterprise zone programs. An introductory segment focuses on major theoretical and policy issues about enterprise zones. This discussion is followed by a summary of studies on two major dimensions of enterprise zone programs: (1) job and investment impacts, and (2) program costs. The research reviewed ranges from individual case studies to cross-state analyses. Interpretation of findings from these studies suggests that enterprise zones vary in their effects on investment and employment in declining areas. This variation is partly explained by the features of program design and the specific attributes of zone contexts. Although enterprise zones have been effective in generating new employment and investment in certain areas, they have important limitations that must be scrutinized more closely to minimize program costs and target benefits to depressed communities more effectively.