Local Economic Development Agencies Research Articles

ОРГАНІЗАЦІЙНО-ПРАВОВЕ ЗАБЕЗПЕЧЕННЯ МІСЦЕВОГО ЕКОНОМІЧНОГО РОЗВИТКУ В УМОВАХ ВІЙНИ В УКРАЇНІ

The article defines the peculiarities of organizational and legal provision of local economic development in Ukraine under martial law. In particular, it is indicated that in the modern conditions of russian armed aggression, when territorial communities are constantly working to solve the problems of their livelihood, it is crucially important to mobilize efforts and reorient communities to activities related to the activation of local economic development. At the same time, local economic development is defined as a process of interaction between local self-government bodies, business structures, civil society institutions and active members of the territorial community, aimed at ensuring the effective functioning of the communal sector of the economy and raising the standard of living of local residents. In this context, it is stated that among the anti-crisis tools of local economic development, which can have a positive effect on the modernization of the economy in territorial communities in wartime conditions, specialists single out: financial leasing, outsourcing, industrial parks, local economic development agencies, investment attraction centers, business incubators, cooperatives, clusters, social entrepreneurship, and others. The article focuses on the characteristics of such tools of municipal economic development as financial leasing, outsourcing, and industrial parks, namely, their regulatory support and advantages in modern conditions are analyzed, and examples of their practical application in Ukraine and abroad are given. It is concluded that the main challenges of local self-government bodies in the conditions of war are: preserving (or restoring) the pace of economic development of the territorial community; stimulating the activity of local businesses and ensuring the proper standard of living of the population; accommodation, economic support and establishment of communication with internally displaced persons on the territory of the community; involvement of the relocated business in the community; integration of internally displaced persons and relocated businesses into the utility sector of the economy, etc. At the same time, it is emphasized that local economic development cannot be based on the situational adoption of certain decisions, but should be a component of the general system of strategic planning for the development of the territorial community.

Напрями формування співпраці територіальних громад у сфері забезпечення місцевого економічного розвитку

The study reveals the relevance of the problem of cooperation between territorial communities in the field of enhancing local economic development. The purpose of the study is to identify problematic aspects, as well as to substantiate recommendations in the part of implementing cooperation between territorial communities to ensure economic development at the local level. On the example of one of the communities of Poltava region an analysis of the state of its economic development was carried out, in particular in terms of the level and structure of entrepreneurial activity, the state of functioning and development of industry, agriculture, and other types of economic activity. Problematic aspects and prospects of local economic development of the community are identified. Promising directions of intermunicipal cooperation of the community, in particular in the areas of hub development in basic activities, are substantiated; industrial clusters and other centers of accumulation of business activity; realization of the tourist potential of the community; support of investment and entrepreneurial projects in the field of creation of enterprises in the sectors of the real sector of the economy with a high level of added value and depth of processing of products; stimulating the entrepreneurial activity of local residents. The scientific novelty of the research results in expanding the instrumentarium of intermunicipal cooperation of communities in the sphere of local economic development. The practical significance of the research results is that a list of instruments that can be implemented by territorial communities to remove obstacles and ensure more effective stimulation of local economic growth is determined. It is displayed that a particularly important aspect in the context of the development of intermunicipal cooperation of territorial communities in the economic sphere is the harmonization of fiscal stimulation policy in terms of local taxes and fees, intermunicipal cooperation in the field of resource-based and organizational support for small businesses (in particular, newly created entities), establishing cooperation between local economic development agencies and the tasks of advising local population and business, helping the population in creation of own business, its support, creation of territorial business incubators.

Інноваційні інструменти місцевого економічного розвитку

Розглянуто основні інноваційні інструменти місцевого економічного розвитку. Здійснено аналіз цих інструментів та обґрунтовано необхідність їх застосування в Україні на сучасному етапі. Виокремлено завдання, які необхідно виконати для підвищення ефективності та результативності використання інноваційних інструментів місцевого економічного розвитку.

ДОСВІД РОЗБУДОВИ ТЕРИТОРІІ ХОРВАТІЇ ПІСЛЯ ЗБРОЙНОГО КОНФЛІКТУ: УМОВИ, ПРІОРИТЕТИ ТА ІНСТРУМЕНТАРІЙ

The article examines experience of the Republic of Croatia in the development of de-occupied and affected territories post the armed conflict. The authors analyzed economic and legal conditions for the construction of the Croatian territories destroyed after the armed conflict and their financial support by international donors through the creation of local economic development agencies, development and implementation of the local economic development concept in Croatia and adaptation of the legal framework to new economic goals. The priorities and four components of the strategic project of the social and economic recovery of Croatia have been determined. The first component of the project aimed at attracting investment in territorial communities, the second component devoted to the process of demining de-occupied territories, the third is the provision of consulting services to strengthen management potential, and the fourth component of the project aimed at supporting sub-projects in such areas as: social integration, economic revival and infrastructure for small communities in Croatia. The article demonstrates the economic and legal instruments of special state support for the development of the de-occupied territories of Croatia as well as the classification of territories requiring special state support. Emphasis placed on the expediency of state administration decentralization and the use of tax incentives, including real estate transfer tax, income tax received in the territory of special state supervision and corporate tax. In addition, noteworthy is the creation of three types of territories that received special state aid through income tax exemption or tax rate differentiation over time. Special state support was provided by providing housing to the population affected by the “Croatian War”. The conducted research made possible to establish the successes and shortcomings of the Croatian experience for the possible extrapolation of developments to Ukrainian realities.

Contextualising Urban Experimentation: Analysing the Utopiastadt Campus Case with the Theory of Strategic Action Fields

Practices of urban experimentation are currently seen as a promising approach to making planning processes more collaborative and adaptive. The practices develop not only in the context of ideal-type concepts of urban experiments and urban labs but also organically in specific governance contexts. We present such an organic case in the city of Wuppertal, Germany, centred around a so-called change-maker initiative, ‘Utopiastadt.’ This initiative joined forces with the city administration and collaborated with a private property owner and the local economic development agency in an unusual planning process for the development of a central brownfield site. Ultimately, the consortium jointly published a framework concept that picked up the vision of the ‘Utopiastadt Campus’ as an open-ended catalyst area for pilot projects and experiments on sustainability and city development. The concept was adopted by the city council and Utopiastadt purchased more than 50% of the land. In order to analyse the wider governance context and power struggles, we apply the social-constructivist theory of Strategic Action Fields (SAFs). We focused on the phases of contention and settlement, the shift in interaction forms, the role of an area development board as an internal governance unit and the influences of proximate fields, strategic action, and state facilitation on the development. We aim to demonstrate the potential of the theory of SAFs to understand a long-term urban development process and how an episode of experimentation evolved within this process. We discuss the theory’s shortcomings and reflect critically on whether the process contributed to strengthening collaborative and experimental approaches in the governance of city development.

The Failure of Opportunity Zones in Oregon: Lifeless Place-Based Economic Development Implementation through a Policy Network

The 2017 Tax Cuts and Jobs Act created a new place-based economic development tool to induce economic activity in identified low-income census tracts throughout the US. In response, the State of Oregon established 86 Opportunity Zones (OZs) at the direction of Governor Kate Brown (Business Oregon 2020). This article examines the rollout of Opportunity Zones in Oregon and what policymakers can learn from its implementation. It looks at how well Opportunity Zones are understood in Oregon by local governments and economic development agencies, and how local governments, local economic development agencies, and the private sector are using and marketing OZs. To assess these questions, we surveyed individuals in the public sector in areas with Opportunity Zones across the state to assess these actions. To supplement the survey, we conducted interviews with private sector actors and shadowed developers in the Portland area to assess their engagement with Opportunity Zones. We used the policy tools and networked implementation literatures as a theoretical foundation. We conclude that Oregon lacks a hierarchal system to implement OZs, so the network has to take a more substantial role in implementation. Opportunity Zones are a clear example of third-party implementation; as the government funds economic development activity through tax expenditures, the private sector is taking the leading role in implementing these projects.

A Question of Capacity and Funding: The Role of Local Economic Development Agencies in South Africa’s Development Landscape

Local economic development (LED) in South Africa is plagued by many institutional and market-related failures that undermine local economies. The institutional failures are attributed to capacity and planning challenges within local government, whereas the market failures are attributed to a lack of market information that causes financial risk aversion at the local government level. These failures have invariably contributed to the LED funding challenge that faces local government-led development. Against this backdrop, Local Economic Development Agencies (LEDAs) were established as subnational economic development institutions with the task of making LED work. An important task for LEDAs is to financially support local development and emerging local enterprises. This article interrogates the capacity of LEDAs to address the LED funding challenge through the case studies of three LEDAs in South Africa. The article finds that LEDAs do not have the necessary financial power to support local development because of their internal funding challenges and lack of financial sustainability model. Further to this, LEDAs remain dependent on parent municipalities as they fail to source development finance outside government structures. The national and provincial government need to develop a new financial sustainability model for LEDAs and a proactive funding strategy for local enterprises.

Local economic development agencies and peripheral small town development: Evidence from Somerset East, South Africa

The activities of Local Economic Development Agencies (LEDAs) represent a channel for place-based development. In South Africa national government has supported the expansion of LEDAs to improve the weak performance of local economic development planning, one of the cornerstones of the developmental state. This article investigates the evolution and operations of a small town LEDA which is situated in one of South Africa’s peripheral regions. The local development facilitation and project work undertaken by the Blue Crane Development Agency (BCDA) in the small town of Somerset East in Eastern Cape Province is discussed. It is shown that this LEDA was innovative in development initiatives which were launched during the period 2004- 2014 for Somerset East and its surrounds. In terms of the projects and operations of BCDA considerable effort was made to identify catalytic opportunities and to support the unlocking of projects in this small town through development facilitation and project management. Nevertheless, the evidence from this case study demonstrates that despite successes, development agencies in South Africa have a strong dependence on parent municipalities which can determine the future direction and sustainability of LEDAs.

Exploring the role of social dialogue in local economic development: A case of a South African Local Economic Development Agency

The world is experiencing a growing recognition of the role of social dialogue in the pursuit of inclusive sustainable economic development. However, the sidelining of non-governmental actors in South Africa’s local government-led development landscape has hampered this agenda. This alienating culture led to the establishment of local economic development agencies (LEDAs) as structures tasked with fostering a participatory approach to local economic development (LED) for an effective response to developmental challenges. This article explored the role of social dialogue in LED through a case study of one LEDA in South Africa. A qualitative approach was deployed by conducting semi-structured interviews with key gatekeepers in the LED space. The findings reveal that whereas social dialogue is embraced at the national level, there is minimal understanding and usage of social dialogue at the local government level. Nevertheless, social dialogue strategies (information sharing, consultation, negotiation, joint decision-making and problem-solving) are used by the LEDA and its various stakeholders. The article argues that there is a need to align the national social dialogue with the local social dialogue through LEDAs to strengthen institutional arrangements for LED.

Local economic development agencies and place-based development: Evidence from South Africa

Local economic development agencies (LEDAs) are increasingly important actors in place-based local economic development particularly in the global South. In South Africa there has been an expanded role for LEDAs in terms of the policy significance of local economic development. Although considerable research has been undertaken concerning the merits, challenges and contributions of LED in South Africa only limited material is available concerning the institutional and organisational arrangements to support the implementation of LED. Using policy documents, close engagement with the key national policy-making government departments and a national survey of the activities, operational challenges, and institutional constraints facing LEDAs, the findings from this investigation provide new insight into their role in place-based development. From the unfolding South African experience the strategic establishment of LEDAs potentially can contribute to maximizing the efficiency of place-based strategies. Arguably, key findings confirm the important contribution that LEDAs can make to locality development in the global South albeit that contribution is influenced by context realities.

Local economic development agencies and place-based development: Evidence from South Africa

Abstract Local economic development agencies (LEDAs) are increasingly important actors in place-based local economic development particularly in the global South. In South Africa there has been an expanded role for LEDAs in terms of the policy significance of local economic development. Although considerable research has been undertaken concerning the merits, challenges and contributions of LED in South Africa only limited material is available concerning the institutional and organisational arrangements to support the implementation of LED. Using policy documents, close engagement with the key national policy-making government departments and a national survey of the activities, operational challenges, and institutional constraints facing LEDAs, the findings from this investigation provide new insight into their role in place-based development. From the unfolding South African experience the strategic establishment of LEDAs potentially can contribute to maximizing the efficiency of place-based strategies. Arguably, key findings confirm the important contribution that LEDAs can make to locality development in the global South albeit that contribution is influenced by context realities.

Assessing the role of Local Economic Development Agencies in KwaZulu-Natal, South Africa

There is a growing recognition of the role of subnational institutions in addressing some of the foremost developmental challenges that South Africa is facing; however, subnational institutions have been mired in inefficiencies and capacity challenges in leading local development. This has led to the establishment of Local Economic Development Agencies as institutions which were expected to give impetus to local economic development and accelerate local government’s responses to unemployment, poverty and inequalities. Yet little is known about the efficiency of Local Economic Development Agencies in addressing the key failures of local economic development. This article employed a qualitative approach in which semi-structured interviews were undertaken with key gatekeepers. The article assessed the roles and functions of Local Economic Development Agencies in addressing key local economic development failings through a case study of three Local Economic Development Agencies in South Africa. The results indicate that while Local Economic Development Agencies do solve the implementation problem, their efficiency is undermined by the lack of coordination of roles and functions in the local government-led development landscape. Furthermore, the roles and functions of Local Economic Development Agencies are limited, constrained and do not necessarily adhere to the premise that led to their establishment. Local Economic Development Agencies thus lack the appropriate legitimate mandate to be the main economic development structure, due to their own inherent capacities.

The role of Local Economic Development Agencies in South Africa’s developmental state ambitions

South Africa’s Local Economic Development Agencies have emerged as appropriate institutional structures for advancing socio-economic development in the local government-led development landscape, due to the inability of local municipalities to lead local economic development. This shift signifies that South Africa is turning to local economic development strategies to address developmental challenges, such as poor socio-economic conditions (unemployment, poverty and inequality), by creating local development solutions and employment opportunities. This article utilises the developmental state theory to examine the role of Local Economic Development Agencies in South Africa’s aspirations of becoming a capable developmental state. While the developmental state literature is concerned with the central role of the state in economic development, this article extends the developmental state theory to the subnational level by arguing that the developmental local government is the local developmental state. In addition, the article locates Local Economic Development Agencies within the developmental state paradigm by showing that Local Economic Development Agencies were established as economic development coordinators at the subnational level to assist local government in addressing South Africa’s triple challenges. Although the roles and functions of South African Local Economic Development Agencies are aligned to the developmental state ideology, their developmental mandate is undermined by the lack of coordination within local institutions.

Economic Development Incentives, Reported Job Creation, and Local Employment

State and local policy makers continue to utilize and emphasize economic development incentives to attract and retain employers, with tax increment financing (TIF) being one of the more popular incentives. Recently, several states increased reporting requirements for local economic development agencies in an attempt to ensure that targeted incentives are achieving their stated objectives. However, the economic validity of these reported jobs depends heavily on the extent to which the incentives draw new economic activity into an area. In this paper, I examine the credibility of the number of jobs reported by local economic development agencies in Missouri as having been created or retained by TIF. The analysis studies the impact of these reported jobs on county employment, as measured by the Bureau of Labor Statistics. Results suggest that the number of jobs reportedly created by TIF districts do not significantly impact county employment.

Imagining an Institutionalised Social Dialogue in the South African Local Government-Led Development Landscape

The world, because of globalisation and the recent economic crisis, has entered an era that recognises the importance of the participation of all stakeholders in economic development matters. This era is accompanied by a decentralisation process that led to an emphasis on participatory approaches to development issues at the local level. However, no participatory approach has been recognised as the most appropriate mechanism for development forums. In the midst of this, social dialogue is proposed as such a participatory approach that can integrate the public, private, businesses and financial institutions in the bid to create effective responses to immediate developmental challenges. The article established that South Africa is still struggling to create efficient economic development planning structures that can address the key failings of local economic development (LED). This article imagines the utilisation of an institutionalised social dialogue in the South African local government-led development space as an antidote to current failures of LED and disparities between the public, private and civil society. Local Economic Development Agencies (LEDAs) can therefore be imagined as appropriate social dialogue structures that can mitigate the current failures of LED through integrating different capacities and resources from local stakeholders. This article therefore recommends the institutionalisation of social dialogue through LEDAs as the collaborative economic development planning agency at the local government-led development landscape.

Economic Development Incentives, Reported Job Creation, and Local Employment

State and local policymakers continue to utilize and place an important emphasis on economic development incentives as a means of attracting and retaining employers, with tax increment financing (TIF) being one of the more popular incentives. Recently, a number of states have increased reporting requirements for local economic development agencies in an attempt to ensure that targeted incentives are achieving their stated objectives. However, the economic validity of these reported jobs depends heavily on the extent to which the incentives draw new economic activity into an area. This paper examines the credibility of the number of jobs reported by local economic development agencies in Missouri as having been created or retained by TIF. The paper examines the impact of these reported jobs on county employment, as measured by the Bureau of Labor Statistics. Results suggest the number of jobs reportedly created by TIF districts do not significantly impact county employment.

Local economic development agencies – Pushing boundaries and addressing change: The case of South Africa’s Aspire (Amathole District Economic Development Agency) during its maturation phase

The operations of local economic development agencies (LEDAs) are of growing concern for local and regional development. This article reflects on the evolution and changes occurring in one LEDA operating in the global South. Although the activities and experiences of a range of LEDAs functioning the global North have been documented, knowledge about the operations of LEDAs in other parts of the world is limited. The case of the Amathole District Economic Development Agency (Aspire) in South Africa is analysed with regard to contextual changes and organisational shifts taking place and impacting upon the unlocking of the region’s economic development potential. This incorporates issues relating to sustainability of both the agency as well as projects it helped to establish. Two distinct chapters in the evolution of the agency are differentiated, namely an establishment and then a maturation phase.

Neoliberalismo local fallido en Latinoamérica: el caso de la red Agencia de Desarrollo Económico Local (ADEL) del PNUD

This article examines the Local Economic Development Agency (LEDA) «new paradigm» model of institutional support for local economic development (LED), a model of led that emerged in the 1990’s as the neoliberal political project began its global ascendancy. The paper draws upon rich primary data from Latin America to demonstrate that the LEDA model has been almost entirely ineffective. Notwithstanding, UNDP has continued to support the leda model because it reflects core neoliberal imperatives – that all development institutions must be (re) structured as private sector-led and financially self-sustainable. In addition, a constituency of support emerged, composed of senior UNDP career officials and external consultants, that derived specific career and financial benefits from the continued operation of the leda model, and this constituency was able to conceal the ineffectiveness of the LEDA model. The article thus demonstrates that ineffective international development policies may be kept alive, Zombie-fashion, so long as they help to promote core neoliberal ideological objectives.

The Zombie-Like Persistence of Failed Local Neoliberalism: The Case of UNDP's Local Economic Development Agency (LEDA) Network in Latin America

This paper examines the effectiveness of the Local Economic Development Agency (LEDA) model of institutional support for local economic development (LED), a model of LED that became very popular in the 1990’s as the neoliberal political project began its global ascendancy. The paper draws upon rich primary data from Latin America, and much secondary data from many other countries, to demonstrate that the LEDA model has been an almost wholly ineffective instrument through which to promote LED, if it has in fact not seriously compromised the LED operations of those communities in which has been established. The LEDA concept has almost no evidence to support the widespread claims that it has improved the LED function in developing countries. The next question then obviously begged is, Why then were so many international donor agencies, notably UNDP, willing to support the LEDA model, and for so long, if it was in fact a manifestly ineffective LED institution? The answer to this question, it is argued, is primarily to be found in the politics and ideology of the LEDAs, which reflect core neoliberal imperatives – that all development institutions must be private sector-led and financially self-sustainable. The manifestly ineffective LEDAs were therefore tolerated, and evidence of their ineffectiveness suppressed, because the LEDAs were the reflection of key neoliberal imperatives.

From lip-service to service delivery in local Economic development: Guidelines to set up an agency for action

The Constitution of South Africa imposes a burden on municipalities to engage in local economic development. Municipal local economic development practitioners are often in doubt regarding the various mechanisms available to them to implement local economic development. This article provides insight into the processes and issues surrounding the use of an external mechanism (a private company owned by the municipality) as a local economic development agency. The lessons learnt from the Overstrand Local Economic Development Agency are compared with findings of an international study of the Organisation for Economic Co-operation and Development on 16 local economic development agencies. The article provides guidelines to local economic development practitioners to follow before, during and after the establishment of a local economic development agency.