Putting public money into private deals

Friday, August 17, 2007

This commentary out of Connecticut raises interesting questions about the new head of Connecticut Innovations Inc., a state agency that invests public funds in new technology companies. Read more.

State governments face a real risk in putting public money into private deals. Political considerations can override the market. Easily. So, for example, one of the major risks facing states with "deal closing" funds comes in making sure that the decisions to make investments are as transparent as possible.

There are ways to manage the risks of political interference. For example, Ohio does a good job of managing its Third Frontier funds by relying on a process of outside review.

posted by Ed Morrison |

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