State governments often argue that it's necessary to give subsidies to private companies to encourage economic development. A new study found that economic development subsidies actually do create jobs—specifically, in lobbying. The authors defined "extraordinarily large" as "a single subsidy to one firm that is 3500 times larger than their historical median award." "Importantly, no new lobbying firms emerge; existing firms simply hire more staff," the authors noted. "This suggests that extraordinarily large incentives shift entrepreneurial effort from productive innovation toward unproductive rent-seeking activities."