Search

Economic development policy has a long history in the U.S. cities. Nevertheless, the scope and pace of local government economic development activity has increased greatly in recent years. One of the explanations for the adoption of economic development policies by local government is a response to economic need. A second set of explanations link the adoption of economic development policies to the activity of a pro-growth coalition of city elites and business interests. Finally, a third set of explanations suggest that particular institutional arrangements may make a difference in determining whether cities will be likely to adopt particular economic development policies.

From the mid-1970s forward, the industrial heartland of the U.S. experienced economic decline. First one industry and then another has gone into a pattern of decline either as a result of the industrial life cycle or international competition. These processes have eroded the traditional Midwestern base of heavy and durable goods manufacture until regional unemployment levels have climbed well above national averages. Not surprisingly, this decline has stimulated state and local governments to seek means of reversing economic decline. In short, the purpose of this article is to assess the impact of a set of incentives in a manner different from the traditional approaches and to test whether previous conclusions might be methodologically bound.