Reindustrialization in Detroit: Capital Mobility and Corporate Influence

Abstract

The absence of a national economic development policy and the need of officials in older cities to rebuild the urban tax base have produced intense competition among municipalities and states to attract corporate investment. Local economic development programs combine state enabling legislation and federal funds to provide financial incentives and facilitate site preparation for new industrial and commercial facilities. The winners in this competition, however, have not been cities and their residents, but large corporations, whose position as major local revenue producers enables them to shape policies, not through behind the scenes manipulation, but through their capacity to withdraw badly needed private capital Although city officials are responsible for formulating development packages, they exercise little policy discretion: the mobility of corporate capital forces them to offer the maximum incentives allowed by state and federal laws.