One of the most enlightening takes on Bob McDonnell’s ethical and legal travails comes from Matt Mitchell at the Mercatus Center. To wit: when government takes on the job of promoting business, you’re inviting corruption:

The inquiry apparently began out of concern for the possibility of a quid pro quo: perhaps the governor and the first lady offered this free promotion in exchange for political and personal favors? For their part, the governor and first lady have maintained that it is their job is to promote Virginia businesses. ...

... the evidence that targeted incentives lead to any sort of widespread prosperity is quite scant. And as my research has emphasized, privileges lead to a host of economic problems because they undermine competition, encourage wasteful privilege-seeking, and put politicians rather than consumers in charge of allocating capital and resources.

But the Virginia story illustrates another cost of privilege: it inevitably invites questions of impropriety. The fact is, it is very difficult to devise objective criteria for dispensing privileges to particular firms.