State Economic Development Policy Research Articles

The Role of Occupational Interests in State Economic Development Policy-Making

N LIGHT of the lack of persuasive evidence that state economic development policies produce beneficial effects, why do states persist in their adoption? One possible reason may be the strength of interests within the states which combine to advocate such measures. The following analysis explores the role of occupational interests in convincing state policy-makers to adopt policies with dubious effects on the goal of economic growth.

Support for Business in the Federal District Courts

Despite extensive literature relating local socioeconomic and political environments to economic outputs of state legislatures and administrative agencies, there has been no comparable study of the impact of local environmental factors on economic policy outcomes of either state or federal trial courts. This article begins to fill this research lacuna by examining the combined and relative effects of state economic development policies and judicial background on federal district courts' economic policymaking. Probusiness state development policies are found to be positively related to support for business in federal district court decisions. Conclusions regarding the impact of environmental factors on district court policy outcomes are offered along with a comparison of this research with the larger and more developed body of state and local policy research.

Can Service-Producing Industries Provide a Catalyst for Regional Economic Growth?

State and local economic development policies are typically targeted toward manufacturing enterprises. In this article, it is argued that state and local officials interested in economic growth should identify and implement policies to stimulate employment in service-producing industries as well as in manufacturing industries. Reluctance to target service-producing industries specifically in economic development policy is partly due to a belief that only manufacturing industries can drive regional employment growth. The fundamental thesis of this article is that service-producing firms can also provide a catalyst for regional growth. Four specific processes by which service-producing industries are a catalyst for economic expansion are discussed: (1) attracting dollars from outside the local economy, (2) import substitution, (3) strengthening the local business infrastructure, and (4) employing resources that are available locally. The article also points out specific research needed to facilitate the development of effective policies to stimulate growth of service-producing industries in local area economies.

ECONOMIC DEVELOPMENT, EMPLOYMENT AND TRAINING POLICY AND FEDERALISM

There are widespread misperceptions about the way in which American federalism has worked in the past and is working now. One is the belief that since the 1930s, the federal government has engaged in many new activities. Another misperception is that liberals support centralization and conservatives, decentralization. Actually, most Americans tend to be pragmatic. The vitality of this American pragmatism is seen in state economic development policies. States have provided leadership in initiating new economic development programs in such areas as foreign trade and enterprise zones. Four major patterns in American federalism characterize the emergence and development of most of these programs: responsiveness, elitism, pluralism, and experimentation. Implications for employment and training policy are examined.

State, Local, and Federal Economic Development Policies: New Federal Patterns, Chaos, or What?

Federal economic development policies and those of state and local governments are potentially complementary, but they are not necessarily consistent in practice. Increasing emphasis on these policies by state and local government, coupled with potential changes in federal tax and spending strategies, provide considerable potential for conflict. State and local economic development policies have a momentum of their own, but many are dependent on aspects of federal tax and spending policy. Industrial revenue bonds and tax-exempt financing of infrastructure are threatened by potential changes in federal tax law. Local development efforts have depended heavily on financing from federal programs such as community development block grants and urban development action grants-programs potentially threatened by attempts to cut the federal deficit. The Reagan administration's major economic development initiative, enterprise zones, has languished in Congress, but many states have adopted the concept. While federal, state, and local officials will probably continue to clash over some development policies, some interesting possibilities for cooperation exist.

State Economic Development Policy and the Political Process

All fifty states have some type of office or agency whose primary responsibility is promoting economic development. Although titles and responsibilities may vary, the agencies share one primary goal: to foster the growth and development of their state’s economy. Generally the agency directly responsible for industrial development is also responsible for economic development.

Taxing, Spending, and Economic Growth in the American States

W HAT EFFECTS, if any, do state taxing and spending policies have on rates of economic development in the states? Do state individual or corporate tax rates or total tax burdens have any identifiable, independent effects on economic growth? Do patterns of state spending for education, highways, welfare and health, or even the redistributional effects of state taxing and spending, have any identifiable, independent effects on economic growth? Or are economic growth rates solely a product of climate, natural resources, geographic location, existing capital investment, and historical patterns of industrial development?