Traditional Strategies and Tools of Local Economic Development

Business retention, revolving loan funds, tax increment financing, tourism, bond issuance, PILOTs, tax abatement…

All are examples of the core strategies and tools utilized every day by most economic developers. Sometimes controversial, oftentimes boringly commonplace, often misunderstood– and almost always in need of some explanation as to why they work and why economic developers use them.

In their day, they might have been sexy like clusters and innovation–but age and gravity has taken their toll. They are now pervasive. Like two aspirin, they work wonders but who cares anymore. We do!

The problem with our traditional strategies and tools is that people mess with them. In particular media,  academics and sometimes the research institutes and think tanks. Often when they translate our strategies and tools into academic and policy research, the description and analysis of these strategies and tools gets distorted–sometimes downright manipulated. Does the expression, hatchet job come to your lips?

Our initial focus is tax abatement. These days, those are fighting words, but as the old-time economic developers know, tax abatement was never very popular and was always under attack. Take a gander at how academic research has dealt with tax abatement. Over the next few decades, the Curmudgeon will also take a look at eminent domain, use of universities as an economic development tool, and maybe economic development zones, and real estate-based economic development.

Don’t fret over Traditional Strategies and Tools of Local Economic Development.

Articles in 'Traditonal Strategies and Tools of Economic Development'

Chambers of Commerce: First Wave Magicians of Main Street

Can you believe up to now no one has written a modern history of American chambers of commerce? Not until Chris Mead recently published his one-of-a-kind Magicians on Main Street. So let’s use Magicians of Main Street and investigate how well the conventional wisdom concerning the FIRST Wave of economic development holds up. If the First Wave doesn’t prove accurate–what does it say about the other two waves?

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Economic Developers: Ignore the Glitz! Focus on What Matters

The core idea behind this series of articles is to help local economic developers navigate and function effectively within their communities–sort of an on-the-job helpful advice. In this issue, we deepen our understanding of the Policy/Practitioner World nexus building upon two elements introduced in the first issue. To penetrate more deeply into the local situation, we will also introduce a new concept: “the policy cycle”. The thrust of our article/series is to move from the glitz–concentrate on making programs work–concentrate on developing programs that address community concerns. problems, and opportunities as they see and feel them.

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What the Heck is Going On with Local Economic Development?

I’m amazed how little is written about what goes on at the state and local levels.

Most of us work in a community or at the state level and our daily professional lives are a lot more complicated than simply “creating jobs/clusters”, “preparing knowledge-based workers” or “developing disruptive entrepreneurs”. OK–there is the usual flood of blogs describing new policy issues, incredibly brilliant programs, and cutting-edge economic development strategies. But there is precious little about what it is like to work in sub-state economic development. There is seldom anyone who writes about how things get done locally and how a local economic developer can function effectively. That is what this issue is about.

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The Vanishing Neighbor

Marc J. Dunkelman, The Vanishing Neighbor: the Transformation of American Community Why should an economic developer read a political sociology book? Because economic growth or decline is not simply the result of good and bad economics! Politics, cultural values, and changes in our personal lifestyles and relationships surprisingly can affect our success at the local and state levels. Despite its strange sounding name, the Vanishing Neighbor explores how economic changes generate societal changes with political consequences that make it difficult to develop effective solutions to address economic and social problems in our communities. What happens if societal change causes economic stagnation, inequality, and political gridlock? That’s what Dunkelman is trying to help us think through. Why does a vanishing neighbor change how we do our jobs?

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Is Joel Kotkin Economic Development's Martin Luther?

The book jacket describes Joel Kotkin’s the New Class Conflict as a “call to arms and a unique piece of analysis about the possible evolution of our society into an increasingly quasi-feudal order”. The image of Kotkin as Martin Luther posting his famous 95 Theses came to my mind Using metaphors gleaned from the medieval world, Kotkin, the iconoclastic but extraordinarily insightful master of Curmudgeons, describes a new ruling class he believes dominate much of contemporary America. What has this got to do with economic development? Plenty! Kotkin’s description/critique of this New Class and its devastating consequences to our society and economy delivers a powerful blow to several prominent economic development strategies. Anyone in economic development can’t ignore this book–no more than the Pope could ignore the Protestant Reformation.

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Quo Vadis–Whither Goest the "Margins of our Labor Force"???

Economic and workforce developers typically confront unemployment by providing basic or enhanced skills and repositioning the unemployed into “hot” occupations or growing industry sectors. Alan B. Krueger, Judd Cramer and David Cho, “Are the Long-Term Unemployed on the Margins of the Labor Market”, Brookings Papers, however, challenge this paradigm and wonder if the unemployed may be on the margins of the labor market–on the road to dropping out completely. Who is Alan Krueger–from 2011 to August 2013 he was President Obama’s White House Chair of the Council of Economic Advisors. So what does Krueger have to say?

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Are Economic Developers Still Held Hostage to the Mobility of Capital?

Economic development’s most deep-seated axiom is that capital is mobile, people can exit, and business can move to greener pastures. How do we get our collective hands around the sad fact nothing is tied down, and our job description/paycheck require us to wave some magic wand and make the problem go away? Paul Peterson’s classic City Limits (1881), questions whether a city can overcome the mobility of capital. Let’s update Peterson and see how things have changed.

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Bloomberg: The Neo-Liberal Economic Developer?

I’ve been reading stuff lately about the goings on in New York City. The new De Blasio administration is proclaimed by many to be the wave of the future? For me it’s too early to tell. Only fair to give the poor soul at least a full year before we see what his new approach shakes down to be. […]

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You Think Working Where You Work is Bad? Try Working Here

Communities, even in the same state, want different things from economic development. They choose similar policies and programs sometimes, but “operate” their economic development programs in rather distinctive ways. And so, political culture enters into the day-to-day of economic development.

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Part II: How to Stop Digging the Legacy City Hole Deeper

A few weeks ago we published Part I of  our commentary on the Lincoln Institute of Land Policy report, Regenerating America’s Legacy Cities by Alan Mallach and Lavea Brachman. To refresh the reader, the Lincoln Institute report defines and identifies eighteen “legacy cities” as central cities with a minimum population of 50,000 (2010)  who have suffered more than a twenty […]

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