This paper focuses on state economic development efforts with an emphasis on formulating a state economic development strategy. An analytical framework for regional policy analysis is discussed. A second framework is presented that outlines criteria for efficient use of state funds. Economic Base theory is discussed in the appendix, along with Shift-Share Analysis. States, although generally lacking a comprehensive development strategy, are active in economic development programs. The "bottom line" in all regional development efforts is enhancement of the productivity of regional resources, particularly human. To ensure the productive use of state financing, eligible candidates for state assistance are being targeted for export-producing businesses that could not achieve their potential for success without this assistance. These programs should be subject to the criterion that the benefits of programs, measured in increased taxes due to the development, be greater than the total cost of the programs and incentives.