Lost Opportunities: The Perplexing Persistence of Enterprise Zones

In recent times in the United States, there have been few domestic policy issues on which Republicans and Democrats have agreed. Yet between 1981 and 2021, Republican presidents Ronald Reagan, George H. W. Bush, George W. Bush, and Donald Trump; Democratic chief executives Bill Clinton and Barack Obama; and many members of Congress from both parties supported some version of “enterprise zones,” urban and rural communities that receive tax and regulatory relief for the private sector with the goal of reducing poverty. Most recently, Trump included what he called “opportunity zones” in the Tax Cuts and Jobs Act, which he signed into law in December 2017.  In uniting behind enterprise zones, however, these politicians have defied the scholarly consensus that such policies have failed to alleviate poverty.  Why have these leaders placed so much faith in plans that have produced such meager results? By exploring the record, the research, and the rationale that have accompanied enterprise zones in the United States, this article finds that the political rewards of enterprise zones for the presidents have superseded the economic risks of enterprise zones for the residents.