Do policymakers locate prisons for economic development?

While public goods can provide an overall increase in welfare, 'inferior' p ublic facilities produce externalities specifically impacting host location s. Heterogeneous jurisdictional attributes, however, can cause net social b enefits to vary across potential host communities. Using data from a unique public works project, this paper empirically investigates whether policyma kers consider heterogeneous conditions when locating prison facilities. Res ults indicate that policymakers follow a process that maximizes net social benefits by systematically delegating such facilities to tagging communitie s; thereby potentially using the public facilities for economic development . Additionally, results suggest that policymakers property consider existin g infrastructure and agglomeration economies in the siting mechanism.