A Finger in the Dike? An Examination of the Efficacy of State and Federal Attempts to Use Law to Stem Outsourcing

Earle, Beverley, Madek, Geralk A., Madek, Christina | January 1, 2007

Many people, not just in the United States, are concerned about the implications of this growth in outsourcing for the future of business. State governments in particular are trying to stop outsourcing and are using the law as a means to do so. However, are these attempts, which are variants of the old “buy American” programs, doomed to be ineffective and ultimately protectionist, without really protecting American business? This paper will examine the developments of offshoring, outsourcing, and insourcing in Part II. Part III examines both state and federal legal efforts to restrict this growth. Part IV examines the WTO and international responses to these developments. Part V examines the Supreme Court’s analysis of tax incentives as a way to attract business to U.S. states. Part VI concludes with an analysis of what might be more efficacious ways to address outsourcing than the misguided attempts to date.