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Information and Market Failure in Local Economic Development: A New Role for Universities?

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  • Stephan Weiler

    (Colorado State University)

Abstract

One of the crucial assumptions regarding the efficiency of the private market is that all involved actors have full information about market opportunities, costs, and benefits. However, this assumption is likely to be only partially fulfilled in many local economic development efforts. In fact, those who stand to benefit most from such efforts may be least able to secure critical information regarding development possibilities. In contrast to most publicly supported top-down initiatives, university researchers may more effectively enhance local development by focusing on the provision and analysis of information to private participants. This article first explores the twin potential information gaps involved in regional industrial development that may affect both private and social investment perspectives. The recent efforts to add value to the highly vulnerable agricultural sector of Colorado’s San Luis Valley then highlight the potential direct economic and indirect methodological impact of such assistance.

Suggested Citation

  • Stephan Weiler, 2000. "Information and Market Failure in Local Economic Development: A New Role for Universities?," Economic Development Quarterly, , vol. 14(2), pages 194-203, May.
    • Handle: RePEc:sae:ecdequ:v:14:y:2000:i:2:p:194-203
    DOI: 10.1177/089124240001400206
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    References listed on IDEAS

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    1. Timothy J. Bartik, 1999. "The Market Failure Approach to Regional Economic Development Policy," Book chapters authored by Upjohn Institute researchers, in: John P. Blair & Laura A. Reese (ed.),Readings in Urban Economics: Issues and Public Policy, pages 14-24, W.E. Upjohn Institute for Employment Research.
    2. 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.
    3. Stephan Weiler, 2000. "Pioneers and Settlers in Lo-Do Denver: Private Risk and Public Benefits in Urban Redevelopment," Urban Studies, Urban Studies Journal Limited, vol. 37(1), pages 167-179, January.
    4. Ward, William A. & Hite, James C., 1999. "Asset Fixity, Asset Specificity And Regional Economic Change: Hypothesis And Implications," Working Papers 18807, Clemson University, Department of Agricultural and Applied Economics.
    5. George J. Stigler, 1961. "The Economics of Information," Journal of Political Economy, University of Chicago Press, vol. 69(3), pages 213-213.
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    Cited by:

    1. Panibratov, Andrei & Chen, Xinchuan, 2018. "The role of informal institutions in the internationalization process of Chinese and Russian firms," Working Papers 15115, Graduate School of Management, St. Petersburg State University.
    2. Stein Kristiansen, 2003. "Information Asymmetry and Economic Concentration: The case of hens and eggs in eastern Indonesia," Working Papers 03-21, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    3. Stein Kristiansen, 2003. "Linkages and Rural Non-Farm Employment Creation: Changing Challenges and Policies in Indonesia," Working Papers 03-22, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    4. Eric Scorsone & Stephan Weiler, 2004. "New Markets as Informational Asymmetries," Economic Development Quarterly, , vol. 18(3), pages 303-313, August.
    5. Stein Kristiansen, 2007. "Entry Barriers in Rural Business," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 16(1), pages 53-76, March.
    6. Walter H. Plosila, 2004. "State Science- and Technology-Based Economic Development Policy: History, Trends and Developments, and Future Directions," Economic Development Quarterly, , vol. 18(2), pages 113-126, May.
    7. John M McGrath & Skip Glenn & Ronald Vickroy, 2016. "Affordable, sustainable local economic research for small urban areas: 22 years of evolution and refinement," Local Economy, London South Bank University, vol. 31(6), pages 733-745, September.
    8. Joshua Drucker & Harvey Goldstein, 2007. "Assessing the Regional Economic Development Impacts of Universities: A Review of Current Approaches," International Regional Science Review, , vol. 30(1), pages 20-46, January.
    9. Matthew Nagle, 2007. "Canonical Analysis of University Presence and Industrial Comparative Advantage," Economic Development Quarterly, , vol. 21(4), pages 325-338, November.
    10. Michael Keane & Eoghan Garvey, 2006. "Measuring the employment effects of the rural renewal tax scheme," Regional Studies, Taylor & Francis Journals, vol. 40(3), pages 359-374.
    11. Harvey Goldstein & Joshua Drucker, 2006. "The Economic Development Impacts of Universities on Regions: Do Size and Distance Matter?," Economic Development Quarterly, , vol. 20(1), pages 22-43, February.
    12. Landini, Austin, Kristopher Deming, and Stephan Weiler, 2024. "Can Bank Density Provide Insights on the Appropriation of Disaster Relief Funds? Evidence from the Paycheck Protection Program," The Review of Regional Studies, Southern Regional Science Association, vol. 54(1), pages 1-26.
    13. John M. McGrath & Ronald Vickroy, 2003. "A Research Approach for Tracking Local Economic Conditions in Small-Town America," Economic Development Quarterly, , vol. 17(3), pages 255-263, August.

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