Pass the Bucks: Credit, Blame, and the Global Competition for Investment

Thumbnail Image



Journal Title

Journal ISSN

Volume Title

Repository Usage Stats


Citation Stats


© 2013 International Studies Association. Both countries and subnational governments commonly engage in competition for mobile capital, offering generous incentives to attract investment. Existing economics research has suggested that these tax incentives have a limited ability to affect investment patterns and are often excessively costly when measured against the amount of investment and jobs created. In this paper, we argue instead that the "competition" for capital can be politically beneficial to incumbent politicians. Building off work on electoral pandering, we argue that incentives allow politicians to take credit for firms' investment decisions. We test the empirical implications of this theory using a nationwide Internet survey, which employs a randomized experiment to test how voters evaluate the performance of incumbent US governors. Our findings illustrate a critical political benefit of offering such incentives. Politicians can use these incentives to take credit for investment flowing into their districts and to minimize the political fallout when investors choose to locate elsewhere.






Published Version (Please cite this version)


Publication Info

Jensen, NM, E Malesky, M Medina and U Ozdemir (2014). Pass the Bucks: Credit, Blame, and the Global Competition for Investment. International Studies Quarterly, 58(3). pp. 433–447. 10.1111/isqu.12106 Retrieved from

This is constructed from limited available data and may be imprecise. To cite this article, please review & use the official citation provided by the journal.



Edmund Malesky

Professor of Political Science

Malesky is a specialist on Southeast Asia, particularly Vietnam. Currently, Malesky's research agenda is very much at the intersection of Comparative and International Political Economy, falling into three major categories: 1) Authoritarian political institutions and their consequences; 2) The political influence of foreign direct investment and multinational corporations; and 3) Political institutions, private business development, and formalization.

Unless otherwise indicated, scholarly articles published by Duke faculty members are made available here with a CC-BY-NC (Creative Commons Attribution Non-Commercial) license, as enabled by the Duke Open Access Policy. If you wish to use the materials in ways not already permitted under CC-BY-NC, please consult the copyright owner. Other materials are made available here through the author’s grant of a non-exclusive license to make their work openly accessible.