THE REGIONAL ECONOMIC EFFECTS OF MILITARY BASE REALIGNMENTS AND CLOSURES IN GERMANY

We identify the causal effect of a reduction in military personnel on a number of socioeconomic indicators within the peripheries of military bases. The base realignments and closures in Germany are used as an exogenous source of variation that allows us to identify the effect of a demand shock on household income, output, unemployment, and tax revenue within a specified buffer zone around each base. The analysis covers 298 communities for the period 2003-2007. Consistent with evidence found elsewhere, we find that these base adjustments have only a marginal impact on the local community in which the bases are located.Armed forces, Base closure, Defense drawdown, Demand shock, Geographic information system, Regional adjustment,

The Equity Impacts of Municipal Tax Incentives: Leveling or Tilting the Playing Field?

The widespread use over the past two decades of Michigan's PA 198 Industrial Tax Abatement program provides an opportunity to assess the inter-urban equity impacts of this economic development tool. Not only has PA 198 been used relatively more often by suburban municipalities, local governments at the metropolitan periphery are more likely to use abatements to attract new plants and new jobs. The older central cities primarily use the program to retain existing jobs, albeit at high cost of lost tax revenues. On balance, it appears that PA 198 has done little to alter the location decisions of participating firms. Copyright 2006 by The Policy Studies Organization.