The Obama administration wants cities and states to push a more regional approach to economic development instead of using tax breaks and other incentives to poach jobs and businesses from each other, according to this story on Stateline.org.

The story notes that the administration believes the current system of economic development — where businesses often use the carrot of jobs and investment to play neighboring cities off each other in hopes of weaning tax breaks — is destructive to the recovery.

One example given is that of Ohio and Michigan, both of which have been smacked by the decline in auto manufacturing. Rather than allow the states to fight each other to attract similar jobs or industries (say, green-technology jobs) the story notes the administration recently gave $25 million to an Ohio plant that will make batteries for electric vehicles built in Michigan. “Federal officials say that the northern Ohio-southern Michigan region is poised to repackage itself as a clean-energy center,” Stateline notes.

Cities and states have tried for decades to end poaching via regional agreements, with limited success. This Journal article about incentive “clawbacks,” noted that a group of cities in Northern Ohio put together an antipoaching agreement where cities share tax revenue to discourage poaching. Various cities, states, counties and regional governments have passed similar measures.

Yet poaching continues, and the cottage industry of economic consultants that act as agents for companies seeking tax breaks. This RTE post noted how officials in Ohio were inflamed when they heard that money from the $787 billion stimulus program might be used to lure Dayton, Ohio institution NCR Corp. to the Atlanta area.

The issue of poaching has gotten even more contentious as local governments grapple with the worst budget gaps in a generation. Along with deep cuts in services, many cities and states have raised taxes to ease budget gaps — prompting others, including President Barack Obama’s hometown, to whistle at out of state businesses.

Just one week after Oregon voters passed a broad tax increase on residents and businesses, Chicago mayor Richard Daley said he wanted to poach Oregon businesses. “It will help [Chicago’s] economic development immediately,” Daley told the Chicago Sun-Times. “You’d better believe it. We’ll be out in Oregon enticing corporations to relocate to Chicago. I’ll be very frank. I make no bones about that.”