The Politics of Local Economic Development

Abstract

This article, written in conjunction with the 10th anniversary of Economic Development Quarterly, reviews the literature on the politics of local economic development. It asks what is known-and not known-about this topic. The article summarizes, assesses, and critiques the literature; indicates its shortcomings; and suggests paths for future research. It examines what the literature says about the forces driving local governments to engage in economic development activity, the factors that account for variation in such activity, the way local officials think about economic development-including its political logic-and the political activity that characterizes local economic development policy. With respect to the local politics of economic development, the article focuses on the interests involved and particularly on the question of how dominant business is in the process, the nature and degree of conflict, and the openness of local economic development decision making to public participation.

Regional Economic Development Compared : EU-Europe and the American South

“…The result, as Harold Wolman and David Spitzley point out, is that "the costs of many of the standard local economic development strategies are relatively invisible." 18 There is reason to think that elected officials are satisfied with this situation. In general, they don't have much motivation to encourage the generation of information about incentive programs.…”

“…The evidence suggests that local officials try to diminish public participation in local economic policy decisions. 22 Instead, they tell a "public story" that tries to preserve electoral support. 23 Given the current information structure of local economic development policy making, it is not only unlikely that local officials will make good incentives decisions, but it is also virtually impossible for citizens to hold them accountable for their choices.…”

“…In a parallel track of work, the Commission was working on what emerged as the European Initiative for Growth (EIG) 18 a plan which included a set of projects that were held to be ready for implementation and which were labelled "Quick-start" projects, requiring 60 EUR billion up until 2010. The funds for cohesion and regional policy were called upon to help, albeit in a non-directive way, given the fact that the resources were essentially outside the European Union's control, and this undoubtedly added to the conviction of those who saw these funds as too inflexible.…”

“…Between the 2000-2006 and 2007-2013, the geography of the latter had changed considerably as a result of enlargement which had seen the addition of 10 new member states with a strong interest in cohesion and regional policy, and with a major voice as a bloc around the table of 25 member states. 19 Ronald Hall (2005) Ibid.,[10][11] The outcome of the negotiations in December 2005 22 , reflecting the balance of the different forces, led to a shaving of 9% from the Commission's proposals for geographically-targeted policies and a major slashing of the sectorally-targeted ones (for example, the finally-agreed figure for the latter for the year 2013 was 12.6 EUR billion compared to the 25.8 EUR billion in the Commission's original proposal, albeit with priority being given to R&D within the total). Mayhew had predicted this reduction, writing in October 2004, over a year before the final settlement: "The very large [proposed] increase in R & D spending is perhaps the weakest part of the whole proposal" and accusing it of not having a 'business plan' 23 .…”

“…Rural counties also showed the state's lowest levels of educational attainment, with 28 percent of their adult population lacking high school diplomas in 2000 compared to 17 percent in metropolitan counties. 18 However they may have stacked up wage-wise nationally, North Carolina's vanished manufacturing jobs were sorely missed. The average rural manufacturing worker in North Carolina earned a little over $42,000 in 2012, which was about 35 percent less than his or her urban counterpart, but still 30 percent more than the average for rural jobs outside the manufacturing sector.…”