And as George Mason University's Christopher Coyne and Lotta Moberg wrote in a 2014 working paper, such subsidies are in fact often damaging, because they misallocate
scarce public resources while encouraging rent seeking, regulatory capture, and cronyism.
To build cities that work--cities that are livable, connected, and affordable, and therefore economically dense--policy makers will need to direct attention toward the deeper structural problems that misallocate
land, fragment development, and limit productivity.
A false or exaggerated report can misallocate
resources, creating distrust and placing units at risk.
When cities play that game, he writes, "The mere threat of such takings will have a chilling effect on private owners' plans to upgrade residences and businesses in areas targeted for 'rescue' by planners." Also, eminent domain-based development tends to misallocate
capital because it distorts price signals and substitutes the tastes of the planners for those of market participants.
Further, he says companies that hold huge cash in hand often misallocate
If the government chooses to increase spending in order to reduce general unemployment it will further misallocate
Conservatives like it because lowering rates stimulates the economy and eliminating loopholes curbs tax-driven economic decisions that grossly misallocate
For example, improving profit margins without regard to who you do business with could undermine your strategy and force you to misallocate
"New compliance mandates would automatically drive up costs and misallocate
business resources in a tough economy without necessarily increasing security," the Chamber wrote.
Grubb cites evidence that schools often waste or misallocate
the resources they have, in part because they operate by outmoded top-down management styles in which leadership does not work in tandem with teachers and the communities.