State Economic Development Policy Research Articles

Governors, Economic Theory, and Development Policy

This article examines governors' views on state economic development policy based on a distinction between two basic categories—supply-side and demand-side approaches. The former emphasizes business incentives, whereas the latter focuses on "homegrown" development through government-business cooperation. The findings, based on data collected from governors' offices in 41 states, reveal support for both approaches, but suggest that supply-side policies remain the more popular of the two. They also show that Republican governors tend to favor the supply-side approach, whereas Democrats emphasize demand-side policies.

County Unemployment in Georgia: The Causes and Potential Role for Economic Development Policy

Economic development has been uneven within many states, often resulting in wide geographic disparities in unemployment. Using county-level panel data, this study examines variation in unemployment rates within Georgia to determine the potential role that state and local economic development policy may play in reducing unemployment in underdeveloped areas. Thus, a particular concern of the study is whether metropolitan areas and central cities have different unemployment rates, once other characteristics are accounted for. The findings of the study do not support urban areas, or, alternatively, very rural areas, as inherently having different unemployment rates. Thus, state economic development policy need not focus on enhancing one type of area over the other to reduce the state unemployment rate. However, the findings suggest the need for increasing high school attainment rates, providing affordable day-care, and addressing the high unemployment among African-Americans.

The Public-Private Partnership in the American State Economic Development Policies

This paper explores an important dimension in the evolution of state economic development strategies, namely the emergence of programmatic public-private partnerships. In contrast to project or task specific partnerships, these arrangements are noted for broad and long term goals aimed at enhancing state economic development capacity. In this paper, I focus on the social and political conditions which have shaped the form and practice of these partnerships. In order to provide some historical depth and substantive scope to this analysis, I have selected for study three states that have entered into distinct approaches: (1) public-private venture capital initiatives, (2) public-private technology development and transfer efforts, and (3) public-private economic capacity building through economic development planning and coordination arrangements. I find that economic conditions unique to each state helped to form distinguishing characteristics of partnerships. I also find important commonalities across the states in regard to the political context of partnership arrangements.

Business Strategy and Cross-Industry Clusters

Although industry clusters are becoming the focus of state economic development policies, most states continue to define clusters in ad hoc ways, often focusing only on clusters of firms in single industries. Such policies run the risk of wasting development resources by neglecting important linkages among firms that cut across industries. Exploiting the dynamic nature of the competitive advantages associated with the clustering process requires an understanding of strategic business decisions made at the firm level. This article draws on previous field research to identify several external economies that contribute to the clustering of firms across industries-collaboration economies, transfers of knowledge, local specialized labor pools, and relationships with nonbusiness institutions. The article concludes by suggesting specific development policies that can identify and use these external economies to attract industry clusters.

Twenty Years of State Economic Development Policy: North Carolina and the Nation

Twenty Years of State Economic Development Policy: North Carolina and the Nation

High-Tech Employment and State Economic Development Policies

States have attempted to attract industries by offering a variety of tax incentives and economic development programs with mixed success. States have recently begun to focus on high-tech industries, where average wages are significantly above the all industry average. This study analyzes whether a state’s tax and expenditure mix can influence high-tech industry location. Empirically, this study advances previous high-tech research by carefully modelling the government budget constraint and by considering more recent data. One emphasis will be whether rural states are inherently unable to attract high-tech industry and its high-paying jobs. In general, the empirical results suggest that a state’s fiscal policies can attract high-tech fums, but states must proceed very cautiously. Furthermore, rural states are not dealt out of the high-tech game.

State government and economic performance

Working from a broadened historical perspective, and employing political and economic analysis, Paul Brace places the states and their economies in a more understandable light.A major work on what has been, until now, an understudied topic among political scientists.--James C. Garand, Editor, American Politics Quarterly.Perhaps the definitive work on state economic development policy to date.--Publius.

A conjectural variations model of strategic rivalry in state economic development policy

Using a conjectural variations model of strategic rivalry, the paper examines the implications of regional policies aimed at creating local employment, given that many regions are pursuing the same policies. Among its results is an explanation for the recent, dramatic shift in regional policy emphasis at the local level from traditional locational subsidy scheme to create jobs to policies that use the tax, expenditure, and regulatory authority of government to improve factor markets (primarily labor quality) and enhance the technological capabilities of the regions. The analysis illustrates that while regional locational subsidy competition is not necessarily a zero sum game, a strategy of using local public sector resources to enhance regional competitiveness, under some circumstances, is superior.

State Economic Development Policy and Practice in the United States: A Survey Article

The states have taken an increasingly active role in economic development policy during the past two decades. This article presents both a comprehensive overview of the state strategies and a statistical overview of the changing economic conditions from which they arise. The strategies can be grouped into three distinct orientations. Chasing and acquisition focuses on bringing into the state businesses, export orders, federal facilities and contracts, tourists, retirees, and other external sources of growth. Self-improvement focuses on helping businesses and people in the state become more competitive by improving education systems, stimulating research, helping firms adopt new technologies, providing venture capital, and improving roads, communications, and other infrastructure. Knowledge and process focuses on doing those things better by making greater use of markets and business practices.

The High-Tech Potential: Economic Development in Rural America

Rural America is at a crossroads in its economic development. Like regions of other First World nations, the traditional economic base of rural communities in the United States is rapidly deteriorating. Natural resources, including agriculture, show little prospect for generating future job growth, and manufacturing has become a new source of instability. Faced with these changes and an increasing vulnerability to international economic events, rural communities have begun to seek high-technology industries and advanced services as candidates for job growth and economic stability. What is the potential for high-tech growth outside the largest cities? What is the role of high-tech industry in the economic development of non-metropolitan America? This book provides a hard-nosed look at the high-tech potential in rural economic development. Some of the questions Glasmeier addresses include: Are rural areas attractive to high tech? Will high tech follow earlier patterns and filter down the lowest-paid jobs to rural areas? Will rural communities be bypassed completely for even lower-wage Third World locations? Glasmeier answers in a sober analysis that separates fact from myth. Empirical data reveals the kinds of high-tech jobs that locate in rural areas, and the kinds of rural areas that attract high-tech jobs. This analysis leads to a highly critical evaluation of state and local economic development policy and recommendations for its improvement. This book is a must for policymakers, practitioners, scholars, and an informed public interested in the promise of high tech and the future of US economic development.

Japanese Direct Investment and Economic Development Policy

The increasing number of Japanese manufacturing plants locating in the United States presents new opportunities for state and local economic development policy. This article compares the location decisions of Japanese start-ups in manufacturing with counterpart domestic industry and concludes that there are substantial distinctions between Japanese and American firms. Except for a few industries, Japanese firms are not locating in those states that are most attractive to counterpart domestic industries, but are more often choosing average-to low-growth states. Interviews with a small sample of Japanese plants and industrial recruiters suggest that Japanese location decisions in many industries are based on a set of intangible considerations that differ from those that are important to domestic firms.

State Economic Policy: The Emerging Paradigm

The conventional paradigm of state economic development policy focused on the attraction of firms from outside the state. Since the early 1970s, the states have expanded their concern to include development of the state economy as a whole. Out of the ad hoc experimentation of the past 2 decades is emerging a new paradigm of state economic development policy with three principal elements. The first is a concept of economic development as a process rooted in a market-driven private sector. The second is a new set of state responsibilities, including a wide range of public actions that affect the process of development. And the third is a set of new institutional capacities required for shaping and carrying out those new responsibilities. During the 1980s, states attempted to devise economic strategies that accounted for their new responsibilities, which had been only dimly defined. In the 1990s, states also will need institutional change strategies required to develop the capacity to more sharply define and carry out those responsibilities.

The States And Biotechnology: Interests, Strategies, and Dimensions

John Portz and Peter Eisinger have provided a valuable conceptual overview of state government initiatives for economic development through biotechnology. Their three major models of policy choice - - based on interest-group processes, strategic planning, and competing interest groups in the allocation of planned development initiatives — seem to be sound theoretically and are convincingly examined empirically. Further, Portz and Eisinger provide a wealth of information regarding comparative state efforts at stimulating economic innovation, the differing state political dynamics underlying alternative development strategies, and differences in how such strategies have been implemented. Their analysis represents an important contribution to the current literature on comparative state economic development policy.

Strategic alignment of community colleges and state economic policy

The 1990s will become the decade of strategic alignment of community colleges and state economic development policy—a formalization of new priorities, roles, and partnerships.

Political Cultural Variations in State Economic Development Policy

The impact ofpolitical culture on state politics has been investigated widely, but little is known about the relationship between political culture and economic development policy, even though such policies play aprominent role in contemporary state politics. Drawing on DanielJ. Elazar's analysis ofAmerican political subcultures, I suggest that moralistic, individualistic, and traditionalistic values imply quite different strategies for promoting economic growth. Empirical evidence shows that moralistic states pursue strategies that emphasize solidarity, while individualistic states employ policies that confer particularistic benefits on investors. For their part, policymakers in traditionalistic states prefer exclusionary incentives that tend to reinforce existing patterns of domination. Whether any of these strategies succeed in realizing their cultural objectives remains to be seen; however, actions that positively affect economic performance may lead to the erosion of cultural values by triggering migrations that bring new values into play.

Political Cultural Variations in State Economic Development Policy

Political Cultural Variations in State Economic Development Policy

Exploring the Politics of State Economic Development Policy

Four major studies of economic development policies adopted by a number of state and local governments have been published recently. Because the books are all lengthy treatments of a problem that has come to preoccupy many public officials, a review of their contents can establish the current state of the art in this important area. The studies all report that an enormous amount of attention has been paid to economic development in the states, leading to a great variety of programs and approaches. The sources of these policies are explored here, as are their results, the most important of which appear to have less to do with economic development than with institutional change. Emergence of the states as leaders in economic development policy suggests the continuing vitality of American federalism, which disburses power and thus encourages broad participation in policymaking.

The rise of the entrepreneurial state: state and local economic development policy in the United States

The rise of the entrepreneurial state: state and local economic development policy in the United States

The Effectiveness of State Economic Development Policies: a Time-Series Analysis

IN THE past thirty or more years, state policy-makers have expanded their efforts to improve the health of their state economies by going beyond traditional road and school building activities. New approaches in this area have included the provision of general obligation and industrial revenue bonds, loans and loan guarantees, tax reductions and exemptions, research and development support, and various programs to direct aid to those who are chronically unemployed. (See ACIR 1963, 1967; Conway 1979; Reinshuttle 1983; Council of State Governments 1976; National Association of State Development Agencies et al. 1984; New York Department of Commerce 1983; U.S. Office of Technology Assessment 1983, for descriptions of state programs.) General studies of the process of creating economic growth stress the many factors involved, including innovation, productivity, employment, and taxation, as well as the difficulty in designing and targeting policies for particular outcomes (Bosworth 1984; Rubin and Zorn 1985; Rasmussen et al. 1982a, 1982b; Nelson et al. 1967; Federal Reserve Bank of Kansas City 1983). State leaders, realizing the complexity of the process of economic growth, have frequently enacted a diverse set of policies. These programs are, in many instances, quite expensive in terms of direct program costs, tax expenditures, or both. One tax expenditure in Arizona for 1984-85 cost the state almost $8 million (Arizona Department of Revenue 1985), while two tax expenditures in Massachusetts in 1986-87 were estimated to cost the state nearly $187 million (Massachusetts House of Representatives 1986). If we add to such figures the amounts of other tax expenditures plus program costs, the totals lie in the billions of dollars of state resources. In most states, data on the costs of tax expenditures are not available.

The Effectiveness of State Economic Development Policies: A Time-Series Analysis

The Effectiveness of State Economic Development Policies: A Time-Series Analysis