As corporations search for new production sites, governments compete furiously using location subsidies and tax incentives to lure them. Yet underwriting big business can have its costs: reduction in economic efficiency, shifting of tax burdens, worsening of economic inequalities, or environmental degradation.

Competing for Capital is one of the first books to analyze competition for investment in order to suggest ways of controlling the effects of capital mobility. Comparing the European Union's strict regulation of state aid to business with the virtually unregulated...