In November the International Institute for Sustainable Development's Global Subsidies Initiative released a report that analyzes government subsidies intended to influence the location of investments.
 
Investment incentives: Growing use, uncertain benefits, uneven controls, provides an up-to-date and comprehensive account of how investment incentives are utilized by governments around the world, the debate over their effectiveness in attracting investment, and their potentially negative impacts on sustainable development.

World-wide the use of investment incentives is pervasive and expanding. Estimates of their aggregate cost to state and local governments range as high as USD$50 billion per year in the United States, while in 2005, €8.4 billion was provided in regional aid in the European Union. These are incomplete estimates, however.
 
Investment incentives are mainly used by industrialized countries, though developing countries are increasingly adopting them in an attempt to counter their use by the North.

Poor transparency by governments makes it practically impossible to obtain a clear picture of the full gamut of investment incentives on offer in both developed and developing countries. This lack of transparency, the report explains, hinders academic and policy analysis, and hamstrings popular participation in decisions over government resources.
 
Investment incentives can be useful policy tools if the anticipated benefits, such as regional development, pollution control, or remedying existing economic distortions, outweigh their drawbacks. However, as with other forms of government subsidies, investment incentives can result in unintended negative consequences.
 
"Investment incentives share with all subsidies to capital what I call ‘the three E's': potential efficiency, equity, and environmental drawbacks," says Kenneth P. Thomas, Associate Professor of Political Science and Fellow in the Center for International Studies, University of Missouri - St. Louis, and author of the GSI report.

Investment incentives frequently create economic inefficiencies, and even the "winning" jurisdiction may not be unambiguously better off, argues Dr. Thomas. Incentives also carry an equity problem, in that they consist of transfers from average taxpayers to the owners of capital, who are usually wealthier. While the impact that investment incentives can have on the environment is sorely under-researched, there is evidence that certain incentives encourage projects that are environmentally harmful or artificially encourage polluting industries.