Why State and Local Economic Development Programs Cause so Little Economic Development

Abstract

Although evaluations show that state and local economic development programs have few effects on economic growth or redistribution of economic activity, explanations for the failures are incomplete. Technocratic explanations have dominated economic development research but cannot account for many program activities. Based on evidence from a Minnesota program, the best explanation emphasizes a perspective of bureaucratic and political imperatives. Economic development programs are not designed and implemented in ways that can achieve their goals, principally because of important politicalforces. Administrators must run a program to garner support of legislators, a governor, and opinion leaders for program survival. State and locally elected officials need economic development programs to deliver quick, visible projects in their efforts to solve their districts' economic problems, manage business climate politics, and achieve other aims. Achieving implicit goals means that programs only occasionally undertake activities likely to achieve explicit aims.

Local Economic Development Initiatives in Ghana: The Challenges and the Way Forward

“…This led to the establishment of co-operatives and community businesses, enterprise zones, urban development corporations, and enterprise councils alongside comprehensive training for community members in various disciplines of business and skills development (Geddes, 2004). Dewar (1998) concurs that LED emerged in North America and particularly in the USA in the early 1970s as a response to a decline in economic growth, and also as a tool to stimulate it. These initiatives were especially directed at areas situated outside large cities and intervention programs initiated by government took the form of loans, grants and tax breaks.…”

The Case for a Pragmatic Qualitative Appraisal Framework for Local Economic Development

“…However, "simple job counting is hardly an adequate evaluation technique, and will not ensure that these efforts retain support" ( [20], p. 25). Some cynics have even argued that many economic development programmes are not rigorously evaluated because they are designed to be visible but not necessarily to enhance the local economy ( [21], p. 85).…”

Regional Economic Development Compared : EU-Europe and the American South

“…The Austrian housing market is often seen as a best practice example for affordable housing supply. 23 Contrary to many other European economies, no national house price bubble affected the Austrian economy. In Austria financing housing is mostly driven by 21 Allison Plyer et ) was created to boost the economy and structured with a strong affordable sector (see 3.1).…”

“…22 Instead, they tell a "public story" that tries to preserve electoral support. 23 Given the current information structure of local economic development policy making, it is not only unlikely that local officials will make good incentives decisions, but it is also virtually impossible for citizens to hold them accountable for their choices.…”

“…19 Ronald Hall (2005) Ibid.,[10][11] The outcome of the negotiations in December 2005 22 , reflecting the balance of the different forces, led to a shaving of 9% from the Commission's proposals for geographically-targeted policies and a major slashing of the sectorally-targeted ones (for example, the finally-agreed figure for the latter for the year 2013 was 12.6 EUR billion compared to the 25.8 EUR billion in the Commission's original proposal, albeit with priority being given to R&D within the total). Mayhew had predicted this reduction, writing in October 2004, over a year before the final settlement: "The very large [proposed] increase in R & D spending is perhaps the weakest part of the whole proposal" and accusing it of not having a 'business plan' 23 . Moreover, the avoidance of a significant reduction in cohesion and regional policy meant that the policy was able to continue to operate outside the poorest regions (formerly known as Objective 1 and renamed as Convergence regions).…”