During the Great Recession and its aftermath, few issues in North Carolina politics have been as contentious as fiscal policy. According to a literature survey of recent studies examining the relationship between public policy and economic performance at the state and local level, it is clear that the policy preferences of fiscal conservatives have strong empirical support. Most studies find that lower levels of taxes and spending, less-intrusive regulation, and lower energy prices correlate with stronger economic performance. Most studies also find that the quantity and quality of infrastructure and the level of educational attainment are linked to economic performance. However, that doesn’t necessarily mean that raising taxes to fund more spending on infrastructure and education will prove to be a good investment, since the relationship between government spending and outcomes is not particularly strong.
For state and local officials, this suggests a strategy for promoting economic growth in both the short term and the long term that includes:
• Keeping overall tax and regulatory burdens as low as possible.
• Spending more tax dollars on public safety and the courts.
• Increasing the productivity of current taxpayer spending on infrastructure and education programs.
These implications of academic research on economic growth closely track with recent public policies adopted in North Carolina. Judging from the available empirical evidence, North Carolina’s new policy mix is likely to result in stronger economic growth in the coming years.
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Budget, Taxation, and the Economy
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Education
- Apprenticeships
- Charter Schools
- Child Care
- Childhood Health and Nutrition
- Class Size
- Common Core State Standards
- Education and the Workforce
- Education Facilities
- Federal Education Policy
- Higher Education Funding
- North Carolina Education Lottery
- Prekindergarten Education
- Public School Finance
- School Choice
- Standards and Curricula
- Teaching Profession
- Testing and Accountability
- Virtual Schools
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Government Regulation
- Alcohol Policy
- Asset Forfeiture
- Connectivity and Broadband
- Convention and Event Centers
- Criminal Law Reform
- Electricity and Energy
- Emerging Ideas and the Sharing Economy
- Eminent Domain
- Government Accountability
- Occupational Licensing
- Public Transit
- Publicly Funded Stadiums
- Red Tape and Regulatory Reform
- Transportation Planning
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Health Care
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North Carolina Info