Can Reorchestration of Historical Themes Reinvent Government? A Case Study of the Empowerment Zones and Enterprise Communities Act of 1993

Abstract

Reinventing government is rapidly becoming the orchestral theme for public sector officials who must face the music of increasing demands on, and a decline in, available resources. Generally associated with issues of productivity and efficiency, the theme of reinventing government has been extended by the Clinton administration to redefine the relationship between the federal government and local communities. Illustrative of this extension is the administration's Empowerment Zones and Enterprise Communities Program enacted by Congress as part of the Omnibus Budget Reconciliation Act of 1993. President Clinton has orchestrated the Empowerment Zones and Enterprise Communities Act (EZEC) as dominant themes in his administrations reinventing government symphony. This dominance is clearly enunciated in his memorandum to the President's Community Enterprise Board, which is chaired by Vice President Gore and includes the secretaries of all major departments and councils in the administration. In his memorandum, the President directs the board to implement the EZEC program so that it reflects the principles of the National Performance Review, the vice president's blueprint for streamlining and reinventing government (Clinton, 1993). The primary tones of the EZEC--enterprise zones and local community planning and empowerment--are not new melodies. The enterprise zone, with its geographically targeted tax reductions and regulatory relief, has been a federal and state refrain for almost 15 years. Community planning and empowerment are dearly repetitions of motifs that linger from the 1960's Model Cities program. Is, then, the EZEC program merely a reorchestration of earlier enterprise zone pieces composed during the Reagan-Bush years, with a Clinton spin from Lyndon Johnson's Great Society? If so, does the EZEC reinvent government? To answer these questions, the concepts of enterprise zones and of the Model Cities program, as well as the lessons learned from them, must be clearly understood. This article begins with the origins of enterprise zones in England and traces their historical development in the United States, on both federal and state levels. After presenting the history of enterprise zones, and the lessons to be learned from them, I proceed to review the lessons to be gleaned from the Model Cities program and close by addressing the question, can reorchestration of historical themes be reinventing government? The Origins of Enterprise Zones: The British ]Experiment The concept of using enterprise zones to encourage economic development did not begin in the United States, but is based on a British experiment in urban revitalization of the late 1970s. Coined as a phrase by geographer Peter Hall, and derived from the apparent economic success of enterprise-zone-type policy precedents established in Hong Kong and in Taiwan, the first public pronouncement of the zone concept is generally traced to England's Sir Goeffrey Howe, a Conservative member of Parliament. Howe's 1978 pronouncement was made in London's dockland district, an area then typical of Britain's distressed urban communities. Howe and his supporters saw the implementation of enterprise zones as a way to alleviate urban distress by allowing entrepreneurs to pursue profit with minimum governmental restrictions. This free-market approach, with its emphasis on tax and regulatory relief, stood in stark contrast to Britain's centrally planned economic development programs, which Howe felt were dismal failures. Howe was given the opportunity to implement enterprise zones when he became Chancellor of the Exchequer in Margaret Thatcher's Conservative administration. His 1980 legislation authorized by Parliament provided for geographically targeted tax incentives and regulatory relief It provided for contractual agreements between the central government and local governments that were to establish zone boundaries and the procedures for granting these tax incentives and regulatory relief to local entrepreneurs. …