| WHO BENEFITS FROM MINORITY BUSINESS SET-ASIDES? THE CASE OF NEW JERSEY.
By Samuel L. Myers Jr. and Tsze
Chan
The Humphrey Institute of Public Affairs, University of
Minnesota, 301 19th Avenue South, Minneapolis, MN 55455
Pelavin Research Institute, Washington, DC
Abstract
Race-based remedies often are justified by evidence of prior
discrimination. They work when they benefit groups previously disadvantaged.
This article examines one such remedy - minority business set-asides - and
its application in the award of public procurement and construction contracts
by the state of New Jersey. Analyzed are contract awards to minority and
non-minority/non-women-owned business enterprises in 1990, as well as
in periods before, during, and after the imposition of a state minority
set-aside program. Using a conventional decomposition approach, the article
reveals significant discriminatory gaps in the success of minority- versus
non-minority-owned firms in obtaining contracts from the state of New
Jersey. The analysis suggests that minority contracting success rates
fell from the pre-set-aside era to the set-aside era and that discriminatory
outcomes persisted. The particular remedy chosen - while justified
based on evidence of prior discrimination - appears not to have
reduced the original discrimination nor did it unambiguously benefit minority
businesses.
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