Privatized economic development still controversial

The old debate in Indiana over whether economic development can be accomplished better outside of state government is spreading to other states. But the there’s no more agreement than ever.

Indiana replaced the Department of Commerce with the privatized Indiana Economic Development Corp. in 2005. At the time, newly elected Gov. Mitch Daniels said private operation, including board members appointed from the private sector, would help the agency move faster to attract jobs.

Ohio and Iowa are the latest states to consider the idea, as Republican candidates for governor in those states call for abandoning their state-run agencies.

“No more bureaucrats, no more bungling, no more tripping over one another,” said U.S. Rep. John Kasich, who has been supported by Daniels in his run for governor of Ohio.

Indiana’s IEDC collected mixed reviews in an Associated Press story about the trend. House Speaker Pat Bauer, a Democrat, was noted for his call to reform IEDC following reports of job commitments that didn’t materialize. John Krauss, who directs the Indiana University Public Policy Institute and was a deputy mayor under former Indianapolis Mayor Bill Hudnut, a Republican, opined that private operation allows for attracting private donations in an era of angry taxpayers.

Scandals aren’t unique to either public or private agencies. In Iowa, allegations of fraud, abuse and sloppy bookkeeping cost the jobs of five workers in the state’s film promotion office; Florida’s privatized organization doled out millions of dollars in incentives to companies that joined the group’s board.

In your mind, what works best—public or private? Any thoughts on how you like IEDC now that it’s been in operation for awhile?