Key sentence:
... some form of economic development efforts is required politically, but, as currently defined and pursued, the efforts waste resources and contribute little.
Meyer, P.B. (1991). Local economic development: What is proposed, what is done, and what difference does it make? Policy Studies Review, 10 (2/3), 172-180.
This appears to be an introduction to symposium papers. As you might guess from the title, Meyer addresses three questions:
(1) What economic development interventions are proposed?
(2) What actions are actually taken and how do they relate to the proposals?
(3) What are the results?
Meyer presents a five-category typology of e.d. interventions.
I. Efforts directed primarily at new business attraction. (Subsidies, etc.)
II. Efforts directed primarily at stimulating local businesses. (Small business assistance, etc.)
III. Geographically-based interventions. (Enterprise zones, etc.)
IV. Human capital strategies. (Worker training and retraining, etc.)
V. Research and analytical efforts. (State, regional, or local economic planning organizations, etc.)
He notes that the approaches aren't adopted equally in practice. He also notes that most approaches require some private-sector response to the public-sector program, so that past experience in terms of private-sector response often determines future proposals.
He also notes that public-private partnerships can raise issues of nonaccountability and cause conflict between program beneficiaries and the general public -- especially if police powers (such as eminent domain) are involved.
In short, public-private interactions define which interventions are deemed acceptable. But actual implementation is subject to two more sets of forces:
(1) the options available to the locality by its position in the world economic system, and this is not shaped by any partnership decisions; and
(2) The politics of implementation and the rewards available to key participants from particular forms of action or inaction.
Which leads to:
The programs implemented at the local level often depend on the options made available by state law. He also notes that programs designed and implemented by the state (his example is NJ casino promotion) may not have the local effects that local officials desire.
Local political considerations, such as inter-local competition, can also affect the programs that are implemented.
Finally, he addresses:
In other words, do the programs have any effect?
First he notes the difficulty in determining "success" -- he cites Rubin (1988). In other words, how much of the success you experienced would have happened without the program?
He notes one study that showed a big mismatch between the objectives of local e.d. programs and the priorities of local businesses. How can you have success if no one cares about what you are offering?
Then he notes the problem of measuring success in terms of output or activity rather than in terms of outcome. [Courant (1994) addresses that issue much more completely.]
In short, the symposium papers find little or no effect of economic development programs.
In his conclusion he notes that:
The political reality is that the need for at least symbolic impacts on local economies [i.e. political officials must do something -- Ed.] -- and the unavoidable fact of inter-local competition for companies -- makes elimination of this type of activity politically impossible.
He suggests that there is too much reliance on Type I, II, and III programs. He says that:
...the wrong tactics are in use, but are accepted as appropriate and are thus resistant to change.
He suggests pursuing high visibility, low cost activity to satisfy the official urge to do something as cheaply as possible.
Alternatively, he suggests more Type IV and V activity since those programs may actually increase local resources in terms of human capital and knowledge.
Posted by Chip on May 22, 2004 at 04:25 PM | TrackBack