Abstract

"Lost Opportunities: The Perplexing Persistence of Enterprise Zones"

Lawrence McAndrews, University of Hong Kong (larry.mcandrews@snc.edu)

"Opportunity zones, hottest thing going," President Donald Trump touted his major antipoverty program, which he signed into law as a component of the Tax Cuts and Jobs Act in December 2017. But the multibillion-dollar legislation, designed to revitalize impoverished urban and rural communities through tax and regulatory relief to the private sector, was hardly new. It was merely the most recent version of "enterprise zones," the remedy prescribed by British Prime Minister Margaret Thatcher and American President Ronald Reagan in the 1980s.

And enterprise zones, which would become "empowerment zones" under President Bill Clinton and "promise zones" under President Barack Obama, had hardly been successful. With few exceptions, they failed to make significant inroads against poverty. The federal Government Accountability Office concluded in several studies that job creation and economic growth were not substantially different inside enterprise zones than immediately outside them. Yet these zones kept on reappearing, even in the same areas. West Philadelphia and Camden, New Jersey, for instance, were empowerment zones under Clinton and promise zones under Obama. Republicans have set aside their distrust of government, while Democrats have overcome their wariness of business. And each succeeding president has assured low-income Americans that this time, he would get it right.

Drawing upon a variety of primary and secondary sources, this study seeks to answer the question of why these chief executives from both parties have placed so much faith in an idea with such a problematic track record. This research can then explain not only the specific shortcomings of "opportunity zones," but the general limitations of federal antipoverty approaches, particularly those that involve public-private collaboration. And it can then unlock the mystery of why, where their predecessors have encountered obstacles, presidents continue to envision opportunities.