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A review of the federal role in regional economic development

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  • Mark Drabenstott

Abstract

Globalization is forcing regions throughout the nation to find new competitive niches in rapidly changing markets. The resulting quest for new economic engines is different in every region, driven by a region?s distinct economic assets and the specific markets it can tap. At the same time, economic experts have discovered a whole new set of strategies that offer the greatest potential in helping regions compete in the global marketplace. These new strategies focus more on the region itself, namely, helping entrepreneurs and skilled workers innovate and seize new market opportunities?an approach strikingly at odds with past strategies that often aimed at recruiting industrial facilities to a region. ; Amid these tectonic shifts in how regions grow their economies, federal policy for economic development goes on largely unchanged. The federal development effort is carried out through nine federal departments and five independent agencies, forming a sort of Rube Goldberg policy apparatus cobbled together over the past 50 years or so. There is no unifying purpose to this legion of federal programs. New questions are being raised about this policy apparatus, however. With big deficits in prospect for the federal budget, every federal program is under new budget scrutiny. The Administration?s recent proposal to redesign economic development grant programs in the federal budget was perhaps the first effort to call attention to how the federal government shapes regional economic development. It will not be the last. ; This report frames in broad terms what the federal government?s future role could be in regional economic development. Three steps are essential in framing that role. The first step is to confirm what regional development policy is today. The second step is to identify what makes regional economies grow in the 21st century. The final step is to consider how federal policy might change to help regions grow in the future.

Suggested Citation

  • Mark Drabenstott, 2005. "A review of the federal role in regional economic development," Monograph, Federal Reserve Bank of Kansas City, number 2005arotfrire.
    • Handle: RePEc:fip:fedkmo:2005arotfrire
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    References listed on IDEAS

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    Cited by:

    1. Gebremeskel Gebremariam & Tesfa Gebremedhin & Peter Schaeffer, 2012. "County-level determinants of local public services in Appalachia: a multivariate spatial autoregressive model approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(1), pages 175-190, August.
    2. David Audretsch & Ronnie J. Phillips, 2007. "Entrepreneurship, State Economic Development Policy, and the Entrepreneurial University," Papers on Entrepreneurship, Growth and Public Policy 2007-11, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    3. Christian Ketels, 2007. "Industrial Policy in the United States," Journal of Industry, Competition and Trade, Springer, vol. 7(3), pages 147-167, December.
    4. Geiguen Shin & Byong‐Kuen Jhee, 2021. "Better service delivery, more satisfied citizens? The mediating effects of local government management capacity in South Korea," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 8(1), pages 42-67, January.
    5. Philip McCann & Raquel Ortega-Argilés, 2013. "Redesigning and Reforming European Regional Policy," International Regional Science Review, , vol. 36(3), pages 424-445, July.

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