P LACES MATTER . The probability that a baby born in the bottom 20% of the income scale in Detroit will make it to the top 20% as an adult is half that of a similar child in San Francisco. One answer is to get people to move. Even a short distance can make a big difference. In America a child in a low-income family who moves from a neighbourhood with less social mobility than average, to one in the same county that has more mobility than average, can expect to earn $200,000 more over their lifetime.

The problem is that Americans are less inclined and able to move than in the past. So policymakers are, rightly, trying to improve the fortunes of left-behind places. That is the ostensible motivation behind the creation of “opportunity zones”, a little-noticed bit of President Donald Trump’s tax-cutting law in 2017. The scheme lures money into deprived places by dangling a big tax break on unrealised capital gains invested in them.

Plenty of countries, including America itself, offer goodies to investors with this goal in mind. The evidence on how effective they are is inconclusive, which makes the new scheme even more striking for its potential scale and generosity. The pot of unrealised gains held by American households and firms is thought to be as much as $6trn. An opportunity-zone investment held for more than a decade can avoid capital-gains tax altogether. The number of places that qualify is bigger than anything that has gone before: the Treasury has certified 8,761 zones, 12% of America’s census tracts. Nearly 35m Americans are estimated to live within them. Whereas past schemes have imposed lots of conditions, the new one is deliberately undemanding (see article). Suck in as much capital as possible, the thinking runs, and stand back.

The first bit of that plan seems to be working. Banks, private-equity firms and property developers are scrambling to set up the funds through which capital is deployed. Sales of property-development sites within the zones are estimated to have jumped by 80% in the first nine months of this year. The real question is: how much will this help distressed communities?

Here, there are two reasons for concern. First, although opportunity zones had to meet income criteria in order to be designated as such, that does not mean they are the places most in need. An analysis by the Brookings Institution, a think-tank, has found that of the eligible census tracts, those selected were more likely to be already gentrifying than those that were passed over. Loopholes inevitably exist. Students may not be high earners, but that does not mean that neighbourhoods close to Stanford and Harvard deserved to be chosen as zones. It is easy to imagine capital flooding into projects and places that the market would have served anyway.

Second, the programme has nothing to say about the staples of long-term economic development: the state of local infrastructure, the connections between businesses and universities, the availability of skilled workers. Amazon has just handed out a very public lesson in the importance of such factors. Its choice of New York and the suburbs of Washington, DC , for two new offices shows how hard it is for aspiring places to compete with established ones (see Free exchange).

Boon, meet doggle

The idea of opportunity zones is not bad. The desire to streamline approvals processes for deploying capital is reasonable. And it is not too late for improvements: one obvious thing to do is to force better disclosure by opportunity funds, so that they have to report not just on total assets, but also on their location and type. The big test will be whether this scheme draws cash into left-behind regions. The danger is that it becomes a giant giveaway, benefiting only people and places that do not need help.