Abstract
When economists offer advice to state and local policymakers about economic development, they rely on a view of the world that is shaped by oversimplified models which in turn have been designed around the type of economic data that are readily available. This distracts policymakers from understanding clearly how the economy works. Economics could be far more useful if economists focused on the factors that shape the millions of decisions that propel the institutional setting within which decisions are made and then ask: What information are decision makers using; and, what incentives do they face to act in different ways?
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