Federal Policy Towards State and Local Economic Development in the 1990s
AbstractThis paper suggests new federal policies towards state and local economic development assistance to business. I argue that there is some evidence that these programs can be effective in encouraging business growth and helping the unemployed. But state and local governments do not have the right incentives to adequately pursue national goals through economic development programs. State and local governments are not inclined to do quality evaluations of their programs and tend to favor business attraction programs over programs that might increase U.S. business productivity. In addition, it is unclear whether economic development efforts are most vigorously pursued by economically depressed areas, in which the national social benefits of economic development are the greatest. A new federal policy towards economic development should provide partial federal support for state and local economic development programs that encourage business productivity. The funding should be coupled with requirements for rigorous outside evaluation, comparing the performance of assisted and unassisted firms. Finally, our system of fiscal federalism should be reformed to provide greater resources for economically depressed areas. This assistance will allow these areas to be more economically competitive.
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Bibliographic InfoPaper provided by W.E. Upjohn Institute for Employment Research in its series Upjohn Working Papers and Journal Articles with number 93-17.
Date of creation: Mar 1993
Date of revision:
Note: A revised version of this paper appears in R. Ebel and R. Norton, eds,. 1993. Research in Urban Economics: (Vol. 9) Structuring Direct Aid: People versus Places. Greenwich, CT: JAI Press, pp. 161-178.
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state; local; economic; development; Bartik;
Other versions of this item:
- Timothy J. Bartik, 1999. "Federal Policy Toward State and Local Economic Development in the 1990s," Book chapters authored by Upjohn Institute researchers, in: RD Norton (ed.), The Millennial City: Classic Readings on U.S. Urban Policy, volume 12, pages 235-251 W.E. Upjohn Institute for Employment Research.
- Timothy J. Bartik, 1993. "Federal Policy Toward State and Local Economic Development in the 1990s," Book chapters authored by Upjohn Institute researchers, in: Robert D. Ebel & R.D. Norton (ed.), Structuring Direct Aid: People Versus Places: Research in Urban Economics, volume 9, pages 161-178 W.E. Upjohn Institute for Employment Research.
- R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General
- J4 - Labor and Demographic Economics - - Particular Labor Markets
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