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

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  • Margaret E. Dewar

    (University of Michigan)

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.

Suggested Citation

  • Margaret E. Dewar, 1998. "Why State and Local Economic Development Programs Cause so Little Economic Development," Economic Development Quarterly, , vol. 12(1), pages 68-87, February.
    • Handle: RePEc:sae:ecdequ:v:12:y:1998:i:1:p:68-87
    DOI: 10.1177/089124249801200106
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    References listed on IDEAS

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    1. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle.
    2. M. E. Dewar & B. Hagenlocker, 1996. "Getting to the Bottom Line on Low-interest Loans to Business: An Evaluation of the Small Cities Economic Development Programme in Minnesota," Regional Studies, Taylor & Francis Journals, vol. 30(1), pages 41-54.
    3. Ivan Turok, 1989. "Evaluation and Understanding in Local Economic Policy," Urban Studies, Urban Studies Journal Limited, vol. 26(6), pages 587-606, December.
    4. Peter S. Fisher, 1985. "Corporate Tax Incentives: The American Version of Industrial Policy," Journal of Economic Issues, Taylor & Francis Journals, vol. 19(1), pages 1-19, March.
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    1. Davide Luca & Andrés Rodríguez-Pose, 2014. "Electoral politics and regional development: assessing the geographical allocation of public investment in Turkey," Working Papers. Collection A: Public economics, governance and decentralization 1402, Universidade de Vigo, GEN - Governance and Economics research Network.
    2. Loveridge, Scott & Nizalov, Denys, 2007. "Increasing the Equity and Efficiency of Tax Abatement Programs," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 37(1), pages 1-5.
    3. Eben Fodor, 2012. "Relationship Between Growth and Prosperity in the 100 Largest U.S. Metropolitan Areas," Economic Development Quarterly, , vol. 26(3), pages 220-230, August.
    4. Hooton, Christopher Alex, 2019. "The application of micro-geographic economic analysis in urban policy evaluation," Evaluation and Program Planning, Elsevier, vol. 72(C), pages 125-135.
    5. Tilman Altenburg & Wilfried Lütkenhorst, 2015. "Industrial Policy in Developing Countries," Books, Edward Elgar Publishing, number 14726.
    6. Ann Markusen (ed.), 2007. "Reining in the Competition for Capital," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number ricc.
    7. repec:rre:publsh:v:35:y:2005:i:3:p:266-90 is not listed on IDEAS
    8. Díaz Bautista, Alejandro & Alberto Aviles, José & Rosas Chimal, Mario Alberto, 2003. "Desarrollo económico de la frontera norte de México," Observatorio de la Economía Latinoamericana, Servicios Académicos Intercontinentales SL. Hasta 31/12/2022, issue 09, July.
    9. repec:rre:publsh:v:36:y:2006:i:1:p:15-43 is not listed on IDEAS
    10. Calcagno, Peter T. & Hefner, Frank L., 2007. "State Targeting of Business Investment: Does Targeting Increase Corporate Tax Revenue?," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 37(2), pages 1-13.

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