EVALUATING URBAN ENTERPRISE ZONES AS A POLICY FOR INNER-CITY MINORITY COMMUNITIES

Abstract

Can enterprise zones have any long-term effects on the economic status of minority populations or on the concentration of poverty in urban neighborhoods? This question was tackled from two perspectives. First, do enterprise zone interventions make sense in the context of existing models of racial inequality and ghetto development. Second, do the existing literature and evaluation studies provide evidence that enterprise zones are benefiting the urban poor in general and poor minorities in particular? This study examines five selected official evaluations of state enterprise zone programs looking at how incentives are targeted toward specific populations and places and whether benefits to targeted communities were measured. The goals of state enterprise zone programs definitely include economic advancement for the disadvantaged and reducing poverty, but these goals are not directly reflected by the structure of enterprise zone programs or program evaluations. Existing measures of benefits to targeted populations or areas, generally yield negative results. The principal finding from this review of enterprise zone evaluations is the weak link between the structure of the programs, what they intend to accomplish, and what accomplishments evaluators measure. Existing evaluation research on enterprise zones does not provide evidence that existing enterprise zone programs are decreasing racial income disparity or improving the conditions of the urban poor. Enterprise zones are the wrong tool to fix the lack of economic opportunity in blighted urban neighborhoods because there is a poor fit between the structure of enterprise zones and the goal of providing opportunities for economic advancement to the urban poor.